Webjet Limited

Webjet LimitedABN 68 002 013 612Annual report for the financial year ended 30 June 2014

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Index to the Annual ReportContents PageDirectors’ Report 2Corporate Governance Statement 11Auditor’s Independence Declaration 14Directors’ Declaration 15Index to the Financial Report 16Consolidated Income Statement 17Consolidated Statement of Comprehensive Income 18Consolidated Balance Sheet 19Consolidated Statement of Changes in Equity 20Consolidated Statement of Cash Flows 21Notes to the Financial Statements 22Independent Auditor’s Report 54Additional Securities Exchange Information 56

Corporate InformationRegistered Office Share RegistryLevel 2 Computershare Investor Services Pty Ltd509 St Kilda Road Level 5Melbourne Vic 3004 115 Grenfell StreetPhone: (03) 9820 9214 Adelaide SA 5000Email: [email protected] Phone: (08) 8236 2300

Principal Administrative Office Company SecretaryLevel 2 Michael Sheehy509 St Kilda Road Level 2Melbourne Vic 3004 509 St Kilda Road

Melbourne Vic 3004

Solicitors AuditorsMinter Ellison BDO Audit (SA) Pty Ltd525 Collins Street Level 7, BDO CentreMelbourne Vic 3001 420 King William Street

Adelaide SA 5000

Principal bankers Internet AddressNational Australia Bank www.webjet.com.auLevel 30, 500 Bourke StreetMelbourne Vic 3000

Webjet LimitedAnd Controlled EntitiesDirectors’ report

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Directors’ report

The directors of Webjet Limited submit herewith the annual financial report of the company and controlled entities (theConsolidated Entity) for the financial year ended 30 June 2014. In order to comply with the provisions of the CorporationsAct 2001, the directors report as follows:

Information about the directorsThe names and particulars of the directors of the company during or since the end of the financial year are:Name Experience

David Clarke(Non-Executive Chairman)

Held senior management positions with the Jetset travel Consolidated Entity from 1977to 1995. He is regarded as pioneering the introduction of wholesale packaging throughdistribution access in Australia and overseas, the development of an integratedfranchise structure and one of the highest ranking travel brands in Australia in the1990's. David was Managing Director of Webjet from 1999 to January 2011.

John GuscicBEc, MBA(Managing Director)

Former Chief Commercial Officer of GTA (a Travelport company). He has beeninstrumental in identifying and shaping new business ventures; forging strong, strategicrelationships and managing both multinational and local customer retention and growth.Prior to Travelport, he founded his own successful strategic consultancy advisinginternet start-ups. Prior to his appointment as MD in February 2011, John has been adirector of Webjet since 2006.

Don Clarke LLB (Hons)(Non-Executive DeputyChairman)

Is a partner in the law firm Minter Ellison and has had extensive commercial experience.He has been associated with Webjet in his capacity as a senior legal advisor for over 10years.

Allan Nahum FCA, FICD, AAISA(Non-Executive Director)

Former partner in the Melbourne based accounting and consulting firm HLB Mann Judd,with extensive experience in the profession as a business consultant. He has worked inthe travel industry as an Auditor and Consultant for over 39 years.

Steven Scheuer BBus (Acc),CPA(Non-Executive Director)

After spending a number of years in public accounting practice, he established his ownmanufacturing and importing business using strong and well known clothing brandlabels throughout Australia and New Zealand.

Roger SharpBA LLB(Non-Executive Director)

Has 25 years' experience in investing, financing and advising in global markets. Rogerhas held a series of regional and global positions in the finance and technology sectors.Based in Singapore, he is the Chairman and Managing Director of Co-investor Group.He currently serves as Chairman of several companies including Asia Pacific DigitalLimited.

Brad HolmanBCom(Non-Executive Director)

Has over 20 years’ experience working in and providing services to the travel industry,including President for Travelport's Asia Pacific, Europe, Middle East and Africanoperations. Currently holds the role of President-International Business Unit forBlackbaud, a publicly listed US technology company. Brad was appointed 19 March2014.

Webjet LimitedAnd Controlled Entities

Directors’ report

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Directors’ shareholdingsThe following table sets out each director’s relevant interest in shares and options in the company as at the date of thisreport.

DirectorsFully paid ordinary shares

NumberShare options

NumberDavid Clarke 9,000 -John Guscic 109,169 6,000,000Don Clarke 10,000 -Allan Nahum 94,500 -Steven Scheuer 4,476,254 -Roger Sharp 90,000 -Brad Holman - -

Remuneration of key management personnelInformation about the remuneration of key management personnel is set out in the remuneration report of this directors’report, on page 6.

Company secretaryMichael Sheehy BEcon ACA, was appointed to the joint position of Company Secretary and CFO on 26 November 2013.Prior to joining Webjet for four years he was the company secretary of Probuild Constructions Pty Limited, the largest divisionof South African listed company WBHO Limited.

Principal activitiesThe principal activity of the Consolidated Entity is the provision of online travel booking services.

Review of OperationsThe year ended 30 June 2014 has produced a profit before tax of $21.1 million (2013: $11.4 million) and net profit after tax of$19.1 million (2013: $6.5 million). During the year the company has experienced a growth in total transaction values of $83million from $884 million to $967 million.

30 June 2014$’M

30 June 2013$’M

30 June 2012$’M

30 June 2011$’M

30 June 2010$’M

Total transaction values 997 884 768 592 504Total number of flight bookings (‘000) 1,078 1,062 1,053 902 798Net profit before tax 21.1 11.4 19.3 15.4 14.5Net profit after tax 19.1 6.5 13.6 11.0 10.5Operating cash flow 3.4 24.5 17.7 14.7 14.1

Webjet completed the re-engineering of the Zuji operating platform in December 2013, which transitioned the Zuji sites inAustralia, Singapore and Hong Kong onto Webjet’s latest Cloud based booking application, along with its associated links toits preferred Global Distribution System and provider of air content, Travelport, resulting in the broadest and mostcomprehensive air content available in the region. As part of these changes, the Zuji service centre operations have beenintegrated into the Webjet high quality control service centres, which will provide the foundation for a closely monitored, highcalibre service delivery. Furthermore, the service offering has been expanded to 24 x 7 for all functions.

Contributing $0.5m profit for the six-month to 30 June 2014 (2013: loss $2.2m), Webjet’s Dubai based B2B FY13 start-upLots of Hotels achieved full year profit breakeven.

Cash and equivalents was $51.8m at 30 June 2014 (2013: $66.8m). Client funds included in cash and equivalents were$18.8m (2013: $29.0m). At 30 June 2013, the recently acquired Zuji business operated on the Travelocity bookings platform.During the year Zuji was successfully migrated onto the Webjet bookings platform, and with Travelocity trading accounts nolonger required, there was a $23.0m reduction in trade and other payables $43.3m (2013: $66.3m).

Changes in state of affairs

On 23 December 2013 Webjet sold 35% of the equity in Webjet Marketing North America LLC to the existing Americanpartners, leaving a 15% ownership in the entity. Further information can be found in note 27.

On 6 June 2014 Webjet announced a material extension of its Australian business with the launch of Webjet Exclusives.Webjet Exclusives offers directly-contracted travel products including hotels, resorts, land and air packages, tours andcruises.

There were no further significant changes in the state of affairs of the Consolidated Entity during the financial year.


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Future developmentsFurther information on likely developments in the operations of the Consolidated Entity and the expected results of thoseoperations has not been included in this financial report because the directors believe it would be likely to result inunreasonable prejudice to the Consolidated Entity.

Subsequent eventsWebjet entered into a binding Heads of Agreement to acquire the SunHotels Group with effect from 1 July 2014. SunHotels,established in 2002, is a substantial online hotel provider with a turnover in excess of €90 million (approximately AUD$130m) and specialises in the provisioning of a wide range of hotels and transfers in European resort destinations selling intothe major markets of Scandinavia and the UK. As such this acquisition will form an important cornerstone platform for theimmediate extension of product sourcing and distribution opportunities underpinned by more than 6,000 directly contractedhotels in the existing portfolio leveraged against a fully owned and scalable technology platform which has been operationalfor over five years.

SunHotels has an impressive history and has been consistently profitable over the past 8 years, including an EBITDA of€2.6million (approximately AUD$3.75 million) in calendar year 2013 with earnings in 2014 tracking significantlyhigher. Webjet is delighted the existing experienced management team is fully committed and enthusiastic about the growthopportunities now available under Webjet’s ownership.

The purchase price is payable in cash and is based on an agreed value of €21 million subject to various settlementadjustments relating to working capital and other matters and will be 100% funded through a euro denominated set financefacility. Webjet will acquire 100% of the entities and has moved into a position of management oversight and Boardrepresentation.

It is expected that following final audit, the satisfaction of various commercial conditions and the completion of due diligence,formal completion will occur at the end of August 2014.

There has not been any other matter or circumstance occurring subsequent to the end of the financial year that hassignificantly affected, or may significantly affect, the operations of the Consolidated Entity, the results of those operations, orthe state of affairs of the Consolidated Entity in future financial years.

DividendsThe final dividend for the year ended 30 June 2013 of $0.07 per share fully franked to 100% was paid on 17 October 2013.The total payment was $5.56 million. An interim dividend for the year ended 30 June 2014 of $0.0625 per share fully frankedtotaling $4.96 million was paid on 11 April 2014. A final dividend of $0.0725 per share, fully franked to 100% has beendeclared by the directors for payment on 17 October 2014 totaling $5.76 million.

Shares under option or issued on exercise of optionsDuring the financial year, the following share-based payment arrangements were in existence:

Options series Grant date No ofoptions

Exerciseprice

Expiry date Grant datefair value

Vestingdate

John Guscic – Tranche 2(a) 19/10/2011 500,000 $3.10 30/06/2016 $0.20 01/09/2013John Guscic – Tranche 2(b) 19/10/2011 500,000 $3.10 30/06/2016 $0.20 01/09/2013John Guscic – Tranche 3(a) 19/10/2011 500,000 $3.80 30/06/2017 $0.22 01/09/2014John Guscic – Tranche 3(b) 19/10/2011 500,000 $3.80 30/06/2017 $0.22 01/09/2014John Guscic – Tranche 1 (c) 13/11/2013 1,000,000 $5.00 30/06/2018 $0.14 30/06/2015John Guscic – Tranche 2 (c) 13/11/2013 1,000,000 $5.50 30/06/2019 $0.16 30/06/2016John Guscic – Tranche 3 (c) 13/11/2013 1,000,000 $6.00 30/06/2020 $0.21 30/06/2017

(a) Tranche 2 – Vested on 1/09/2013 upon achievement of the board determined budget for 2013. Tranche 3 – vests on 1/09/2014 ifCompany achieves board determined budget for 2014. John Guscic is also required to be an employee at the time of exercise ofthe options.

(b) Tranche 2 – Vested on 1/09/2013 upon remaining in employment at 30 June 2013. Tranche 3 – Vests on 1/09/2014 if remains inemployment at 30 June 2014.

(c) Tranche 1 – Vests on 30/06/2015 if remains in employment at 30 June 2015. Tranche 2 – Vests on 30/06/2016 if remains inemployment at 30 June 2016. Tranche 3 – Vests on 30/06/2017 if remains in employment at 30 June 2017.

The holder of these options does not have the right, by virtue of the option, to participate in any share issue or interest issueof the company or of any other body corporate or registered scheme.

No shares or interests have been issued during or since the end of the financial year as a result of the exercise of options.


Directors’ report

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Indemnification of officers and auditorsDuring the financial year, the company paid a premium in respect of a contract insuring the directors of the company (asnamed above), the company secretary and all executive officers of the company and of any related body corporate against aliability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. Thecontract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

To the extent permitted by law, the company has agreed to indemnify each of its officers and the officers of its related bodiescorporate against any liability incurred as such an officer.

Directors’ meetingsThe following table sets out the number of directors’ meetings (including meetings of committees of directors) held during thefinancial year and the number of meetings attended by each director (while they were a director or committee member).During the financial year, 12 Board meetings, 4 Nomination and Remuneration Committee meetings, 4 Audit Committeemeetings and 3 Risk Management Committee meetings were held.

Board of directors

Nominationand Remuneration

Committee Audit CommitteeRisk Management

CommitteeDirectors Held Attended Held Attended Held Attended Held Attended

David Clarke 12 12 4 4 - - 3 3John Guscic 12 12 - - - - - -Don Clarke 12 12 4 4 - - 3 3Allan Nahum 12 10 2 2 4 4 - -Steven Scheuer 12 12 - - 4 4 - -Roger Sharp 12 12 - - 3 3 - -Brad Holman 4 4 - - - - - -

Non-audit servicesNo non-audit services were provided during the current or prior year by the auditor.

Auditor’s independence declarationThe auditor’s independence declaration has been received and is included on page 14 of the annual report.

Rounding off of amountsThe company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance withthat Class Order amounts in the directors’ report and the financial report are rounded off to the nearest thousand dollars,unless otherwise indicated.


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Remuneration report - auditedThis remuneration report, which forms part of the directors’ report, sets out information about the remuneration of WebjetLimited’s directors and its senior management for the financial year ended 30 June 2014. The term ‘key managementpersonnel’ refers to those having authority and responsibility for planning, directing and controlling the activities of theConsolidated Entity, directly or indirectly, including any director (whether executive or otherwise) of the Consolidated Entity.

The prescribed details for each person covered by this report are detailed below under the following headings: key management personnel; remuneration policy; relationship between the remuneration policy and company performance; remuneration of key management personnel; and service and employment agreements of key executives

Key management personnelThe directors and other key management personnel of the Consolidated Entity during or since the end of the financial yearwere:

David Clarke (Non-Executive Chairman) John Guscic BEc, MBA (Managing Director) Don Clarke LLB (Hon) (Non-Executive Deputy Chairman) Allan Nahum FCA, FICD, AAISA, (Non-Executive Director) Steven Scheuer BBus (Acc) (Non-Executive Director) Roger Sharp BA LLB (Non-Executive Director) Brad Holman BCom (Non-Executive Director) – Appointed 19 March 2014 Shelley Beasley BA (Comm), GradDipBusIntStrLship – (Chief Operating Officer) Robert Turner BCom ACA (Chief Financial Officer) – Resigned 23 August 2013 Michael Sheehy BEcon ACA (Chief Financial Officer and Company Secretary) – Appointed 26

November 2013

Except as noted, the named persons held their current position for the whole of the financial year and since the end of thefinancial year.

Remuneration PolicyThe Consolidated Entity’s remuneration policy seeks to ensure that:

1. it is able to attract and retain management and operating staff with a particular and specialised mix of marketing,commercial and technical skills appropriate for its business plan. This blend of skills is sought from a competitiveenvironment where there is limited supply.

2. remuneration is competitive with the appropriate incentives for continued employment, which, in turn, is animportant component in the protection of the Consolidated Entity’s intellectual property which provides part of theConsolidated Entity’s competitive edge.

3. the interests of management and general operating staff reflect a close alignment with the interests ofshareholders.

Accordingly, the Consolidated Entity has in place a range of incentive programs at all levels, relative to certain KPIs whichrelate to quality standards, cost management and budget achievement.The company does not subscribe, at senior level, to the philosophy of excessive ‘at risk components’ at a cash salary leveland considers a more appropriate methodology is to limit the ‘at risk component’ to a meaningful but not excessive level. Putmore succinctly, it considers total employment should be ‘at risk’ if performance does not deliver prescribed results.The company monitors remuneration levels through industry comparisons, market intelligence and comparative data ofpublicly listed companies.

Relationship between the remuneration policy and company performanceThe financial and business performance of the Consolidated Entity (of which the overall earnings and performance of theConsolidated Entity compared to its budgets and prior years is an important part) is a material factor in the determinationof the nature and amount (or value, as appropriate) of the remuneration of the key management personnel. However, whilethe Board does have regard for, and is extremely cognisant of the need to drive shareholder wealth and value throughimproved year on year performance and the payment of dividends (or returns of capital), as there are many and variedfactors that affect (positively or negatively):

the market price of the Company's shares; and its ability to pay dividends or make returns of capital,

neither the actual shareholder wealth generated in a financial year nor the relationship, if any, between the ConsolidatedEntity’s performance and the actual shareholder wealth generated in that, financial results are important factors indetermining the remuneration policies and/or overall remuneration of the key management personnel in any year.


Directors’ report

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30 June2014$’000

30 June2013$’000

30 June2012$’000

30 June2011$’000

30 June2010$’000

Revenue 98,644 74,772 57,719 43,548 38,877Net profit before tax 21,079 11,443 19,297 15,386 14,508Net profit after tax 19,127 6,484 13,613 11,006 10,517

30 June2014

30 June2013

30 June2012

30 June2011

30 June2010

Share price at start of year $4.45 $3.38 $2.00 $1.88 $1.30Share price at end of year $2.42 $4.45 $3.38 $2.00 $1.88Interim dividend1 6.25cps 6.0cps 6.0cps 5.0cps 5.0cpsFinal dividend1 7.25cps 7.0cps 7.0cps 6.0cps 5.5cpsBasic earnings per share 24.24 8.74 18.81 14.41 13.93Diluted earnings per share 24.18 8.66 18.79 14.33 13.761 Franked to 100% at corporate income tax rate

Remuneration of key management personnelThe remuneration tables below are prepared on an accruals basis for bonuses as required by Corporations Regulation2M.3.03(4).

Short-term incentives

Post-employment

benefitsShare-based

paymentSalary& fees Bonus Superannuation

Options& rights Total

2014 $ $ $ $ $Non-executive directorsDavid Clarke 167,200 - 32,800 - 200,000Don Clarke 82,569 - 7,638 - 90,207Allan Nahum 40,000 - 35,000 - 75,000Steven Scheuer 45,766 - 4,234 50,000Roger Sharp 80,000 - - - 80,000Brad Holman 17,077 - 1,580 - 18,657

Executive officersJohn Guscic 676,084 - 25,000 283,1271 984,211Shelley Beasley 370,355 - 11,111 - 381,466Robert Turner 43,292 - 4,005 - 47,297Michael Sheehy 223,613 - 20,684 - 244,297

2,171,135

Short-term incentives

Post-employment

benefitsShare-based

paymentSalary& fees Bonus Superannuation

Options& rights Total

2013 $ $ $ $ $Non-executive directorsDavid Clarke 243,000 - 24,000 - 267,000Don Clarke 96,331 - 8,670 - 105,001Allan Nahum 62,500 - 25,000 - 87,500Chris Newman 25,780 - 2,320 - 28,100Steven Scheuer 37,676 - 3,391 - 41,067Roger Sharp 40,000 - - - 40,000

Executive officersJohn Guscic 574,999 340,000 25,000 214,6391 1,154,638Richard Noon 195,249 - 20,500 - 215,749Shelley Beasley 350,000 115,750 11,543 - 477,293Robert Turner 235,897 80,000 23,589 - 339,486

2,755,8341 The ongoing share based payment expense is performance related. The share-based payments make up 28.8% (2013: 18.5%) of JohnGuscic’s total salary.

BonusesFor the key management personnel the bonus plan is based upon the Consolidated Entity achieving the Board approvedbudget for the full year. As the budget was not achieved no bonuses vested with the executives for the year ended 30 June2014 and therefore all bonuses were forfeited. None of these bonuses are able to be carried forward to future periods.


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Service and employment agreements of key executivesThe following table sets out the key elements of the senior executive service agreements.

Agreement Date Term(Years)

Notice Period TerminationPayment

Base Salary (IncSuperannuation)

$

Salary atRisk

$

PossibleTotal

$J Guscic 1 February 2014 3.4 12 Months 12 months in

lieu of notice750,000 650,000 1,400,000

S Beasley 21 March 2011 rolling 6 Months 6 months inlieu of notice

381,466 92,589 474,055

M Sheehy 25 November 2013 rolling 3 Months 3 months inlieu of notice

310,000 46,500 356,500

Value of options to key management personnelDuring the financial year, the following share-based payment arrangements were granted:Options series Grant date No of

optionsExercise

priceExpiry date Grant date

fair valueper option

Grant datefair value of

options*

Vestingdate

John Guscic – Tranche 1 (a) 13/11/2013 1,000,000 $5.00 30/06/2018 $0.14 $139,891 30/06/2015John Guscic – Tranche 2 (a) 13/11/2013 1,000,000 $5.50 30/06/2019 $0.16 $157,756 30/06/2016John Guscic – Tranche 3 (a) 13/11/2013 1,000,000 $6.00 30/06/2020 $0.21 $211,222 30/06/2017

(a) Tranche 1 – Vests on 30/06/2015 if remains in employment at 30 June 2015. Tranche 2 – Vests on 30/06/2016 if remains inemployment at 30 June 2016. Tranche 3 – Vests on 30/06/2017 if remains in employment at 30 June 2017.

* The value of options granted during the year differs to the expense recognized as part of each key management person’sremuneration because this value is the grant date fair value calculated in accordance with AASB 2 Share-based Payment.

Key management personnel remuneration philosophyThe board monitors and reviews the performance of executive directors as well as the performance of key seniormanagement. The Board receives regular updates on the performance of the Consolidated Entity as a whole. The Chairmanof the company endeavours to implement change at a Board level to incorporate recommendations that flow out of thisreview process. The company has in place a Nomination and Remuneration Committee which seeks to ensure that theConsolidated Entity’s remuneration levels are appropriately aimed at delivering maximum benefit for the Consolidated Entity.The Nomination and Remuneration Committee has responsibility for ensuring that the Consolidated Entity:

Has coherent remuneration policies and practices to attract and retain executives and directors who will createvalue for shareholders;

Observes those remuneration policies and practices; and Fairly and responsibly rewards executives having regard to the performance of the Consolidated Entity, the

performance of the executives and the general pay environment.

Remuneration CommitteeThe current members of the Nomination and Remuneration Committee are the independent directors Don Clarke, DavidClarke and Allan Nahum. The Committee may if considered necessary, receive external assistance and advice to assist it indetermining appropriate levels of remuneration for the directors of the Company. No remuneration consultant services havebeen engaged during the financial year.

Senior Management and Executive Director Remuneration

The Consolidated Entity aims to reward executives with a level and mix of remuneration commensurate with their positionand responsibilities and so as to:

reward executives for company, business unit and individual performance against targets set by reference toappropriate benchmarks;

align the interests of executives with those of shareholders; link reward with the strategic goals and performance of the company; and ensure total remuneration is competitive by market standards.

Remuneration consists of the following key elements: fixed remuneration; and incentive remuneration in the form of performance and retention bonuses.

The proportion of fixed remuneration and variable remuneration is established for each executive by the Managing Director.The proportion of fixed remuneration and variable remuneration is established for the Managing Director by the Nominationand Remuneration Committee.


Directors’ report

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Non-executive director remuneration

The Board seeks to set aggregate remuneration at a level which provides the company with the ability to attract and retaindirectors of the highest calibre, whilst incurring a cost which is acceptable to shareholders. When setting fees for individualdirectors, account is taken of the responsibilities inherent in stewardship of the Consolidated Entity and the demands made ofdirectors in the discharge of their responsibilities.

Fixed remunerationThe level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the positionand is competitive in the market. Fixed remuneration is reviewed annually by the Nomination and Remuneration Committeein consultation with the Managing Director. The process consists of a review of company-wide, business unit and individualperformance, relevant comparative remuneration in the market and internal and, where appropriate, external advice onpolicies and practices.

Senior executives are given the opportunity to receive their fixed (primary) remuneration as either cash or superannuation. Itis intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the company.

Variable remuneration

The company has implemented a bonus plan based on the performance of the business exceeding the annual budget.

Key management and directors equity holdingsThe following shares are either held directly or via an associated party.

Fully paid ordinary shares of Webjet Limited

Balanceat 30 June 2013

Granted ascompensation

Received onexercise of

options Net other changeBalance

at 30 June 2014No. No. No. No. No.

2014

David Clarke 5,000 - - 4,000 9,000John Guscic 109,169 - - - 109,169Don Clarke 10,000 - - - 10,000Allan Nahum 134,084 - - (39,584) 94,500Steven Scheuer 4,326,254 - - 150,000 4,476,254Roger Sharp - - - 90,000 90,000Brad Holman - - - - -Shelley Beasley 100,516 - - - 100,516Michael Sheehy - - - - -

Share options of Webjet LimitedBalance

at 30 June2013

Granted ascompen-

sation ExercisedNet otherchange

Bal at 30June 2014

Bal vestedat 30 June

2014

Vested butnot

exercisableVested andexercisable

Optionsvested

during yearNo. No. No. No. No. No. No. No. No.

2014

John Guscic 3,000,000 3,000,000 - - 6,000,000 2,000,000 - 2,000,000 1,000,000

All share options issued to key management personnel were made in accordance with the provisions of the employee shareoption plan.

No share options were exercised during the current or prior financial year.

Transactions with key management personnelThere were no transactions or loans between the company and key management personnel other than those disclosedabove in the Remuneration Report.


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Transactions with other related parties

Minter Ellison Lawyers of which Don Clarke is a principal was paid a total $426,469 (2013: $1,374,058) during the year. Alltransactions were conducted on a commercial arm’s length basis and charged accordingly. An amount of $1,217 was owedas at 30 June 2014 (2013: $124,445) to Minter Ellison Lawyers.

PT. AbdiTeknologiInformasi (ATI) of which Brad Holman is a director was paid a total of $37,255 (2013: $8,116) during theyear. All transactions were conducted on a commercial arm’s length basis and charged accordingly. No amount wasoutstanding as at 30 June 2014 (2013: nil) to PT. AbdiTeknologilnformasi.

End of audited Remuneration Report

Signed in accordance with a resolution of the directors made pursuant to s.298 (2) of the Corporations Act 2001.On behalf of the directors

.........................................................................................................David Clarke (Chairman)

19 August 2014


Corporate governance statement

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Corporate governance statementThe Board of Directors are responsible for corporate governance of the company and its controlled entities. The Boardconsiders good corporate governance a matter of high importance and aims for best practice in the area of corporategovernance. This section describes the main corporate governance practices of the company.

In reviewing the corporate governance structure of the Consolidated Entity, the Board has reviewed and considered the ASXCorporate Governance Councils’ recommendations. Comment is made where key principles are not followed due to the sizeand nature of the Consolidated Entity.

Board ResponsibilitiesThe Board’s key responsibilities are:

oversight of the operation of the Consolidated Entity including establishing, reviewing and changing corporatestrategies;

ensuring that appropriate internal control, reporting, risk management and compliance frameworks are in place; appointing, removing, reviewing and monitoring the performance of the Managing Director to whom the Board

have delegated the day to day management of the Consolidated Entity; approval of the annual report (including the financial report), the budget and the business plan of the

Consolidated Entity; regular (at present at least monthly) review of the Consolidated Entity’s performance against the budget and the

business plan; approving material contractual arrangements including all major investments and strategic commitments; making decisions concerning the Consolidated Entity’s capital structure, the issue of any new securities and the

dividend policy; establishing and monitoring appropriate committees of the Board including the Audit and Risk Committee and the

Nomination and Remuneration Committee; reporting to shareholders; and ensuring the Consolidated Entity’s compliance with all legal requirements including the ASX Listing Rules.

Structure of BoardThe maximum number of directors provided for by the Company’s constitution is fifteen and the Company currently hasseven directors on the Board. A director may be appointed by resolution passed at a general meeting or, in the case ofcasual vacancies, by the directors.

Potential additions to the Board are carefully considered by the Board prior to being nominated to shareholders or appointedas casual vacancies. The skills, experience and expertise of each of the directors are set out in the first section of the AnnualReport.

The Board currently has six non-executive directors being David Clarke (Chairman), Don Clarke (Deputy Chairman), AllanNahum, Steven Scheuer, Roger Sharp and Brad Holman. The current Board is sufficiently balanced to protect the interests ofshareholders. The Company facilitates and pays for directors and committee members to obtain professional independentadvice if they require it.

Code of ConductThe Consolidated Entity has a Code of Conduct as well as a number of internal policies and operating procedures aimed atproviding guidance to directors, senior management and employees on the standards of personal and corporate behaviourrequired of all personnel. The Code of Conduct covers specific issues such as trading in Company securities by directors,officers and employees and also provides guidance on how to deal with business issues in a manner that is consistent withthe Company’s responsibilities to its shareholders.

Risk CommitteeThe Board has appointed a Risk Committee that operates under a charter approved by the Board.

The purpose of the Risk Committee is to provide an oversight across the Group for all categories of risk. In this role, the RiskCommittee has delegated authority from the Board to approve and oversee the processes used to identify, evaluate andmanage risk. At its discretion, the Risk Committee may make recommendations to the Board, including recommendationsrelating to the Group’s risk appetite; and to assist the Board to understand the risks faced by the Group.

Responsibilities include : the identification, assessment and management of risk; monitoring the adherence to internal risk management policies and procedures; and oversight of compliance systems, including legal, licensing and regulatory compliance processes developed by

management.

Webjet LimitedAnd Controlled EntitiesCorporate governance statement

12

Where appropriate, liaise with the Audit Committee and : review issues raised by external Audit and, if applicable, internal audit processes that impact the risk

management framework or the Group’s risk management; review and make recommendations to the Board on draft statutory statements covering governance and risk

management issues in accordance with the requirements of the applicable regulators; and direct any special investigations deemed necessary and engage and consult independent experts where

considered necessary or desirable to carry out its duties and rely on the advice of such experts.

The members of the Risk Committee at the date of this annual report are David Clarke (Chairman) and Don Clarke (DeputyChairman).

Audit CommitteeThe Board has appointed an Audit Committee that operates under a charter approved by the Board.

The Committee provides a direct link between the Board and the external audit function. The Committee is responsible forreviewing and reporting to the Board that:

the system of internal control which management has established effectively safeguards the assets of theConsolidated Entity;

accounting records are properly maintained in accordance with statutory requirements; financial information provided to shareholders is compliant with applicable International Financial Reporting

Standards; and the external audit function is effective.

The Committee is responsible for the appointment of the external auditor and ensures that the incumbent firm (and theresponsible service team) has suitable qualifications and experience to conduct an effective audit. The external auditengagement and quality review partners will be required to rotate every five balance dates.

The Audit Committee meets as required to review the half-year and annual results of the Consolidated Entity, and to reviewthe audit process, and those representations made by management in support of monitoring the Consolidated Entity’scommitment to integrity in financial reporting. The Managing Director, the Chief Financial Officer and the external auditors areinvited to attend meetings of the Committee at the discretion of the Committee.

The members of the Audit Committee at the date of this annual report are Brad Holman (Chairman of the Committee), AllanNahum, Steven Scheuer and Roger Sharp.

Nomination and Remuneration Committee CharterThe Nomination and Remuneration Committee is a committee of the Board of directors of Webjet Limited. The role of theNomination and Remuneration Committee is not an executive role. The role of the Committee is to help the Board achieve itsobjective to ensure the company:

has a Board of an effective composition, size and commitment to adequately discharge its responsibilities andduties;

has coherent remuneration policies and practices to attract and retain executives and directors who will createvalue for shareholders;

observes those remuneration policies and practices; and fairly and responsibly rewards executives having regard to the performance of the Consolidated Entity, the

performance of the executives and the general pay environment.

The Nomination and Remuneration Committee is responsible for: identifying and recommending to the Board, nominees for membership of the Board; identifying and assessing the necessary and desirable competencies and characteristics for Board membership

and regularly assessing the extent to which those competencies and characteristics are represented on theBoard;

developing and implementing processes to identify and assess necessary and desirable competencies andcharacteristics for Board members; and

ensuring succession plans are in place to maintain an appropriate balance of skills on the Board and reviewingthose plans.

Executive remuneration and incentive policies and practices are performance based and aligned with the ConsolidatedEntity’s vision, values and overall business objectives. In effect, the Committee must give appropriate consideration to theConsolidated Entity’s performance and objectives, employment conditions and remuneration relativities.


Corporate governance statement

13

DisclosureThe Consolidated Entity’s policy is that shareholders are informed of all major developments that impact on the ConsolidatedEntity. The Consolidated Entity treats its continuous disclosure obligations seriously and has a number of internal operatingpolicies and principles (including the Code of Conduct referred to above) that are designed to promote responsibledecision-making and timely and balanced disclosure.

The Board is ultimately responsible for ensuring compliance by senior management and employees of the ConsolidatedEntity with the Consolidated Entity’s policies and therefore requires that senior management and employees have an up todate understanding of ASX listing requirements. The Company also ensures that the directors and senior managementobtain timely and appropriate external advice where necessary.

The Company currently places all relevant announcements made to the market including all past annual reports and policiesincluding corporate governance together with related information on its website: www.webjet.com.au/About.

Additionally, the Company ensures that its external auditor is represented at the annual general meeting to answershareholder questions about the conduct of the audit and the preparation of the auditor’s report.

Performance and RemunerationThe Board reviews the performance of the executive director as well as the performance of key senior management. TheBoard receives regular updates of the performance of the Consolidated Entity as a whole.

The Chairman of the Company endeavors to implement change at a Board level to incorporate recommendations that flowout of this review process.

As previously stated, the Company has in place a Nomination and Remuneration Committee which seeks to ensure that theConsolidated Entity’s remuneration levels are appropriate and aimed at delivering the maximum benefit for the ConsolidatedEntity.

The current members of the Nomination and Remuneration Committee are Don Clarke and David Clarke. The Committeereceives external assistance and advice to assist it in determining appropriate levels of remuneration for the directors of theCompany. The Managing Director is invited to attend meetings of the Committee at the discretion of the Committee.

Remuneration details of each of the directors and senior management are set out in the ‘Remuneration Report’ section of theDirectors’ Report.

DiversityWorkplace diversity refers to the variety of differences between people in an organisation. Diversity encompasses, among arange of matters, differences in gender, race, ethnicity, age, disability and cultural background. Webjet believes thatembracing and leveraging diversity in its workforce contributes to the achievement of its corporate objectives and enhancesits reputation. It enables Webjet and its controlled entities to:(a) recruit the right people from a diverse pool of talented candidates;(b) retain and develop an appropriate skills base within the Consolidated Entity make more informed and innovative

decisions, drawing on the wide range of ideas, experiences, approaches and perspectives that employees from diversebackgrounds, and with differing skill sets, bring to their roles in Webjet; and

(c) better represent the diversity of all stakeholders.

Webjet is committed to achieving the goals of:(a) providing access to equal opportunities at work based primarily on merit;(b) attracting and retaining a management team with a diverse mix of skills, experience and expertise; and(c) fostering a corporate culture that embraces and values diversity and uses that diversity to deliver business outcomes.

Webjet is an equal opportunity employer and welcomes people from a diverse range of backgrounds. Every employee withinWebjet is responsible for supporting and maintaining Webjet's corporate culture, including its commitment to diversity in theworkplace. In particular, managers have responsibility for the maintenance and promotion of an equal opportunity workplace.

BDO CentreLevel 7, 420 King William StreetAdelaide SA 5000GPO Box 2018 Adelaide SA 5001Australia

Tel: +61 8 7324 6000Fax: +61 8 7324 6111www.bdo.com.au

BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77050 110 275, an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UKcompany limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved underProfessional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

DECLARATION OF INDEPENDENCE

BY MICHAEL HAYDON

TO THE DIRECTORS OF WEBJET LIMITED

As lead auditor of Webjet Limited for the year ended 30 June 2014, I declare that, to the best ofmy knowledge and belief, there have been:

No contraventions of the auditor independence requirements of the Corporations Act 2001in relation to the audit; and

No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Webjet Limited and the entities it controlled during the period.

Michael HaydonDirector

BDO Audit (SA) Pty Ltd

Adelaide, 18 August 2014

Jessica.Barker

Typewritten text

14


Directors’ declaration

15

Directors’ Declaration

The directors of the Company declare that:

(a) In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts asand when they become due and payable;

(b) In the directors’ opinion, the attached financial statements are in compliance with International Financial ReportingStandards, as stated in note 3 to the financial statements;

(c) The remuneration disclosures included in pages 6 to 10 of the directors’ report (as part of audited RemunerationReport), for the year ended 30 June 2014, comply with section 300A of the Corporations Act 2001;

(d) In the directors’ opinion, the attached financial statements and notes thereto are in accordance with theCorporations Act 2001 and Corporations Regulations 2001, including compliance with accounting standards andgiving a true and fair view of the financial position as at 30 June 2014 and performance of the Consolidated Entityfor the year ended on that date; and

(e) The directors have been given the declarations required by s.295A of the Corporations Act 2001.

Signed in accordance with a resolution of directors made pursuant to s.295 (5) of the Corporations Act 2001.

On behalf of the Directors

................................................David Clarke (Chairman)

19 August 2014

Webjet LimitedAnd Controlled EntitiesIndex to the financial report

16

Index to the financial reportContents PageConsolidated income statement 17Consolidated statement of comprehensive income 18Consolidated balance sheet 19Consolidated statement of changes in equity 20Consolidated statement of cash flows 21Notes to the financial statements1 General information 222 Application of new and revised Accounting Standards 223 Significant accounting policies 234 Critical accounting judgements and key sources of estimation uncertainty 315 Segment information 316 Revenue 327 Investment income 328 Other gains and losses 339 Income taxes 3310 Profit for the year 3511 Trade and other receivables 3612 Other financial assets 3613 Other assets 3614 Property, plant and equipment 3715 Intangible assets 3816 Trade and other payables 3917 Other financial liabilities 3918 Provisions 4019 Other liabilities 4020 Issued capital 4121 Reserves 4122 Retained earnings 4223 Earnings per share 4224 Dividends on equity instruments 4325 Contingent liabilities and contingent assets 4326 Operating lease arrangements 4327 Subsidiaries 4428 Deed of guarantee 4429 Investments in associates 4730 Cash and cash equivalents 4731 Financial instruments 4832 Share-based payments 5033 Related party transactions 5134 Business Combinations 5235 Remuneration of auditors 5336 Events after the reporting period 5337 Parent entity information 5338 Approval of financial statements 53


Consolidated income statement

17

Consolidated income statementfor the financial year ended 30 June 2014

Consolidated

Note2014$’000

2013$’000

Revenue 6 95,188 72,864Investment income 7 887 1,327Other gains and losses 8 3,456 1,908

99,531 76,099

Share of losses of associates 29 (48) (58)Employee benefits expenses (21,116) (16,931)Depreciation and amortisation expenses (2,801) (2,000)Marketing expenses (20,827) (17,798)Operating costs (22,375) (16,675)Option expenses (283) (215)Technology expenses (5,084) (5,407)Administrative expenses (1,684) (1,295)Finance costs (264) (102)Directors’ fees (473) (533)Other expenses (3,497) (3,642)

Profit before tax 21,079 11,443Income tax expense 9 (1,952) (4,959)

PROFIT FOR THE YEAR 19,127 6,484

Profit/(loss) attributable to:Owners of the Company 19,248 6,587Non-controlling interests (121) (103)

19,127 6,484

Earnings per shareBasic (cents per share) 23 24.24 8.74Diluted (cents per share) 24.18 8.66

Notes to the financial statements are included on pages 22 to 53

Webjet LimitedAnd Controlled EntitiesConsolidated statement of comprehensive income

18

Consolidated statement of comprehensive incomefor the financial year ended 30 June 2014

Consolidated2014$’000

2013$’000

Profit for the year 19,127 6,484

Other comprehensive income, net of income tax nil

Items that may be reclassified subsequently to profit or lossChanges in fair value of available-for-sale financial assets 55 -Exchange differences on translating foreign operations (507) 1,692

Other comprehensive income for the year, net of income tax nil (452) 1,692

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 18,675 8,176

Total comprehensive income attributable to:Owners of the Company 18,796 8,298Non-controlling interests (121) (122)

18,675 8,176



Consolidated balance sheet

19

Consolidated balance sheetas at 30 June 2014

Consolidated

Note2014$’000

2013$’000

Current assetsCash and bank balances 30 51,792 66,812Trade and other receivables 11 20,308 17,026Current tax asset 9 1,881 -Other assets 13 4,131 5,010Total current assets 78,112 88,848Non-current assetsInvestments in associates 29 175 -Other financial assets 12 255 200Property, plant and equipment 14 3,047 1,570Deferred tax assets 9 4,800 4,624Intangible assets 15 42,829 42,214Total non-current assets 51,106 48,608

Total assets 129,218 137,456

Current liabilitiesTrade and other payables 16 43,266 66,275Other financial liabilities 17 416 20Current tax liabilities 9 1,544 1,904Provisions 18 2,175 4,070Other liabilities 19 1,712 954Total current liabilities 49,113 73,223Non-current liabilitiesDeferred tax liabilities 9 2,970 3,233Provisions 18 288 257Other liabilities 19 7,563 -Total non-current liabilities 10,821 3,490

Total liabilities 59,934 76,713

Net assets 69,284 60,743EquityIssued capital 20 40,179 40,179Reserves 21 1,818 1,987Retained earnings 22 27,287 18,645

Equity attributable to owners of the Company 69,284 60,811Non-controlling interests - (68)

Total equity 69,284 60,743


Webjet LimitedAnd Controlled EntitiesConsolidated statement of changes in equity

20

Consolidated statement of changes in equityfor the financial year ended 30 June 2014

Share capital

Available forsale

revaluationreserve

Equity-settledemployee

benefitsreserve

Foreigncurrency

translationreserve

Retainedearnings

Totalattributable

to owners ofthe parent

Non-controlling

interests Total$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Balance at 1 July 2012 11,042 - 250 (189) 21,796 32,899 54 32,953

Profit for the year - - - - 6,587 6,587 (103) 6,484Other comprehensive income for the year, net ofincome tax - - - 1,711 - 1,711 (19) 1,692Total comprehensive income for the year - - - 1,711 6,587 8,298 (122) 8,176Transactions with owners in their capacity asownersContributions of equity, net of transaction costs andtax 29,137 - - - - 29,137 - 29,137Recognition of share based payments - - 215 - - 215 - 215Payment of dividends - - - - (9,738) (9,738) - (9,738)Sub-total 29,137 - 215 1,711 (3,151) 27,912 (122) 27,790Balance at 30 June 2013 40,179 - 465 1,522 18,645 60,811 (68) 60,743

Balance at 1 July 2013 40,179 - 465 1,522 18,645 60,811 (68) 60,743

Profit for the year - - - - 19,248 19,248 (121) 19,127Other comprehensive income for the year, net ofincome tax - 55 - (507) - (452) - (452)Total comprehensive income for the year - 55 - (507) 19,248 18,796 (121) 18,675Transactions with owners in their capacity asownersDifference arising on disposal of interest in asubsidiary - - - - (86) (86) 189 103Recognition of share based payments - - 283 - - 283 - 283Payment of dividends - - - - (10,520) (10,520) - (10,520)Sub-total - 55 283 (507) 8,642 8,473 68 8,541Balance at 30 June 2014 40,179 55 748 1,015 27,287 69,284 - 69,284



Consolidated statement of cash flows

21

Consolidated statement of cash flowsfor the financial year ended 30 June 2014

Consolidated

Note2014$’000

2013$’000

Cash flows from operating activitiesReceipts from customers 103,638 64,331Payments to suppliers and employees (95,253) (34,069)Cash generated from operations 8,385 30,262Interest received 787 1,292Interest and other costs of finance paid (264) -Transaction costs related to acquisition of subsidiary - (1,456)Income taxes paid (5,548) (5,561)

Net cash generated by / (used in) operating activities 30 3,360 24,537

Cash flows from investing activitiesPayments for property, plant and equipment 14 (2,418) (1,376)Payments for intangible assets 15 (3,117) (4,185)Payment for acquisition of subsidiary, net of cashacquired (2,208) (4,667)Dividends received 100 35

Net cash generated by / (used in) investing activities (7,643) (10,193)

Cash flows from financing activitiesProceeds from issue of shares - 29,995Payment for issue transaction costs - (1,201)Dividends paid to company’s shareholders (10,520) (9,738)

Net cash generated by / (used in) financing activities (10,520) 19,056

Net increase/(decrease) in cash and cash equivalents (14,803) 33,400

Cash and cash equivalentsat the beginning of the financial year 66,812 33,761Effects of exchange rate changes on the balance of cashheld in foreign currencies (217) (349)

Cash and cash equivalentsat the end of the financial year 30 51,792 66,812


Webjet LimitedAnd Controlled EntitiesNotes to the financial statements

22

1. General informationWebjet Ltd (the company) is a public company listed on the ASX and incorporated in Australia. The addresses of its registeredoffice and principal place of business are disclosed in the introduction to the annual report. The principal activities of theCompany and its subsidiaries (the Consolidated Entity) are described in the Directors Report.

Statement of complianceThese financial statements are general purpose financial statements which have been prepared in accordance with theCorporations Act 2001, Accounting Standards and interpretations, and comply with other requirements of the law. The financialstatements compromise the consolidated financial statements of the Consolidated Entity. For the purposes of preparing theconsolidated financial statements, the Consolidated Entity is a for-profit entity. Accounting Standards include AustralianAccounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of theConsolidated Entity comply with International Financial Reporting Standards (‘IFRS’).

Basis of preparationThe consolidated financial statements have been prepared on the basis of historical cost, except for certain non-current assetsand financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below.Historical cost is generally based on the fair values of the consideration given in exchange for assets. All amounts are presentedin Australian dollars, unless otherwise noted.

The company is a company of the kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and in accordance with thatClass Order amounts in the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

2. Application of new and revised Accounting StandardsThe following new and revised Standards and Interpretations have been adopted in the current year and have affected theamounts reported in these financial statements. Details of other Standards and Interpretations adopted in these financialstatements but that have had no effect on the amounts reported are set out separately.

New and amended standards adopted by the group

None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1July 2013 affected any of the amounts recognised in the current period or any prior period and are not likely to affect futureperiods.

Standards and Interpretations in issue not yet adoptedAt the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yeteffective or adopted.

Standard/Interpretation Effective for annualreporting periods

beginning on or after

Expected to be initiallyapplied in the financial

year ending

AASB 9 ‘Financial Instruments’ 1-Jan-18 30-Jun-19

AASB 2012-3 Offsetting financial instruments 1-Jan-14 30-Jun-15

AASB 2013-3 ' Amendments to AASB 136 – RecoverableAmount Disclosures for Non-Financial Assets '

1-Jan-14 30-Jun-15

Interpretation 21 Accounting for levies 1-Jan-14 30-Jun-15

AASB 2014-1 ‘Amendments to Australian AccountingStandards – Part A – Annual Improvements 2010-2012 and2011-2013 Cycles’

1-Jul-14 30-Jun-15

AASB 2013-9 ‘Amendments to Australian AccountingStandards – Conceptual Framework, Materiality andFinancial Instruments’

1-Jan-18 30-Jun-19

IFRS 15 – ‘Revenue from Contracts with Customers’ 1-Jan-17 30-Jun-18

The Consolidated Entity has not yet assessed the impact of these standards.


Notes to the financial statements

23

3. Significant accounting policiesThe following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Basis of consolidationThe consolidated financial statements incorporate the financial statements of the Company and entities controlled by theCompany (its subsidiaries). Control is achieved where the Company is exposed to, or has rights to, variable returns fromits involvement with the entity, and has the ability to use its power to affect those returns. Subsidiaries are consolidatedfrom the date on which control is transferred to the Company and are deconsolidated from the date that control ceases.

Total comprehensive income of subsidiaries is attributed to the owners of the company and to the non-controlling interesteven if this results in the non-controlling interests having a deficit balance.

Where necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policiesinto line with those used by other members of the Consolidated Entity.

All intra-Consolidated Entity transactions, balances, income and expenses are eliminated in full on consolidation.

Changes in the Consolidated Entity’s ownership interest in subsidiaries that do not result in the Consolidated Entity losingcontrol are accounted for as equity transactions. The carrying amounts of the Consolidated Entity’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any differencebetween the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid orreceived is recognised directly in equity and attributed to owners of the Company.

When the Consolidated Entity loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculatedas the difference between (i) the aggregate of the fair value of the considerations received and the fair value of anyretained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiaryand any other non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values andthe related cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity areaccounted for as if the Consolidated Entity had directly disposed of the relevant assets (i.e. reclassified to profit or loss ortransferred directly to retained earnings as specified by applicable Standards). The fair value of any investment retainedin the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequentaccounting under AASB 139 ‘Financial Instruments: Recognition and Measurement’ or, when applicable, the cost oninitial recognition of an investment in an associate or jointly controlled entity.

(b) Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a businesscombination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assetstransferred by the Consolidated Entity, liabilities incurred by the Consolidated Entity to the former owners of the acquireeand the equity instruments issued by the Consolidated Entity in exchange for control of the acquiree. Acquisition-relatedcosts are recognised in profit or loss as incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controllinginterests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) overthe net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, afterreassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumedexceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fairvalue of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit orloss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of theentity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controllinginterests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice ofmeasurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measuredat fair value or, when applicable, on the basis specified in another Standard.

Where the consideration transferred by the Consolidated Entity in a business combination includes assets or liabilitiesresulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-datefair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments areadjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments areadjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed oneyear from the acquisition date) about facts and circumstances that existed at the acquisition date.


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3. Significant accounting policies (cont’d)

(b) Business combinations (cont’d)

The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurementperiod adjustments depends on how the contingent consideration is classified. Contingent consideration that isclassified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted forwithin equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reportingdates in accordance with AASB 139 or AASB 137 (as appropriate), with the corresponding gain or loss recognised inprofit or loss.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which thecombination occurs, the Consolidated Entity reports provisional amounts for the items for which the accounting isincomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets orliabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of theacquisition date that, if known, would have affected the amounts recognised as of that date.

Business combinations that took place prior to 1 July 2009 were accounted for in accordance with the previous versionof AASB 3.

(c) Investments in associatesAn associate is an entity over which the Consolidated Entity has significant influence and that is neither a subsidiary noran interest in a joint venture. Significant influence is the power to participate in the financial and operating policydecisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity methodof accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordancewith AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’. Under the equity method, investments inassociates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changesin the Consolidated Entity’s share of the net assets of the associate, less any impairment in the value of individualinvestments.

Losses of an associate in excess of the Consolidated Entity’s interest in that associate are recognised only to the extentthat the Consolidated Entity has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the Consolidated Entity’s share of the net fair value of the identifiable assets,liabilities and contingent liabilities of the associate recognised at the date of the acquisition is recognised as goodwill. Thegoodwill is included within the carrying amount of the investment and is assessed for impairment as part of thatinvestment. Any excess of the Consolidated Entity’s share of the net fair value of the identifiable assets, liabilities andcontingent liabilities over the cost of the acquisition, after reassessment, is recognised immediately in profit or loss.

Where a Consolidated Entity entity transacts with an associate of the Consolidated Entity, profits and losses areeliminated to the extent of the Consolidated Entity’s interest in the relevant associate.

(d) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operatingdecision maker. The chief operating decision maker, who is responsible for allocating resources and assessingperformance of the operating segments, has been identified as the Managing Director.

(e) Foreign currencyThe individual financial statements of each entity are presented in its functional currency being the currency of theprimary economic environment in which the entity operates. For the purpose of the consolidated financial statements, theresults and financial position of each entity are expressed in Australian dollars, which is the functional currency of WebjetLimited and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functionalcurrency are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reportingperiod, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of thereporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated atthe rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms ofhistorical cost in a foreign currency are not retranslated.

Exchange differences are recognised in profit or loss in the period in which they arise except for exchange differences onmonetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely tooccur (therefore forming part of the net investment in foreign operations), which are recognised initially in othercomprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment.



25


(e) Foreign currency (cont’d)

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Consolidated Entity’sforeign operations are expressed in Australian dollars using exchange rates prevailing at the end of the reporting period.Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuatedsignificantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchangedifferences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. disposal of the Consolidated Entity’s entire interest in a foreign operation, or adisposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointlycontrolled entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreignoperation), all of the accumulated exchange differences in respect of that operation attributable to the Consolidated Entityare reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controllinginterests are derecognised, but they are not reclassified.

In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation, the proportionateshare of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profitor loss. For all other partial disposals (i.e. of associated or jointly controlled entities not involving a change of accountingbasis), the proportionate share of the accumulated exchange differences in reclassified to profit or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities ofthe foreign operation and translated at the closing rate.

(f) Goods and services taxRevenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the

cost of acquisition of an asset or as part of an item of expense; andii. for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables orpayables. Cash flows are included in the consolidated statement of cashflows on a gross basis. The GST component ofcash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority isclassified within operating cash flows.

(g) Revenue

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are netof returns, trade allowances, rebates and amounts collected on behalf of third parties.

The group recognises revenue when the amount of revenue can be reliably measured, it is probable that futureeconomic benefits will flow to the entity and specific criteria have been met for each of the group’s activities as describedbelow. The group bases its estimates on historical results, taking into consideration the type of customer, the type oftransaction and the specifics of each arrangement.

Revenue from booking fees on travel bookings is recognised when the booking is made by the customer and paymenthas been received. Commission revenue is recognised upon the provision of the related service.

There is no credit risk associated with the booking fee as the amount is received from the customer at the time ofbooking and is non-refundable. There is some credit risk associated with commissions. Some commissions are accruedon a ticketed basis (that is the Consolidated Entity has discharged its obligation as an agent), and some commissionsaccrued when the customer has obtained the service from the third party service provider.

Dividend revenue from investments is recognised when the Consolidated Entity’s right to receive payment has beenestablished. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effectiveinterest rate applicable.

(h) Share-based payments

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-linebasis over the vesting period, based on the Consolidated Entity’s estimate of equity instruments that will eventually vest.At each reporting date, the Consolidated Entity revises its estimate of the number of equity instruments expected to vest.The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vestingperiod, with corresponding adjustment to the equity-settled employee benefits reserve.


26


(i) Income taxCurrent taxCurrent tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxableprofit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantivelyenacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent thatit is unpaid (or refundable).

Deferred taxDeferred tax reflects movements in temporary differences. Temporary differences are differences between the tax baseof an asset or liability and its carrying amount in the statement of financial position. The tax base of an asset or liability isthe amount attributed to that asset or liability for tax purposes.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets arerecognised to the extent that it is probable that sufficient taxable amounts will be available against which deductibletemporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilitiesare not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities(other than as a result of a business combination) which affects neither taxable income nor accounting profit.

Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from the initialrecognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries andassociates except where the Consolidated Entity is able to control the reversal of the temporary differences and it isprobable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising fromdeductible temporary differences associated with these investments and interests are only recognised to the extent that itis probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences andthey are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when theasset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted orsubstantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the taxconsequences that would follow from the manner in which the Consolidated Entity expects, at the reporting date, torecover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority andthe Consolidated Entity intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the periodCurrent and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in othercomprehensive income or directly in equity, in which case the current and deferred tax are also recognised in othercomprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initialaccounting for a business combination, the tax effect is included in the accounting for the business combination.

Tax consolidationThe company and all its wholly-owned Australian resident entities became part of a tax-consolidated group on 1 July2007 under Australian taxation law. Webjet Limited is the head entity in the tax-consolidated group. Tax expense/income,deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidatedgroup are recognised in the separate financial statements of the members of the tax-consolidated group using the‘separate taxpayer within group’ approach by reference to the carrying amounts in the separate financial statements ofeach entity and the tax values applying under tax consolidation. Current tax liabilities and assets and deferred tax assetsarising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are recognised bythe company (as head entity in the tax-consolidated group).

Due to the existence of a tax funding arrangement between the entities in the tax-consolidated group, amounts arerecognised as payable to or receivable by the company and each member of the Consolidated Entity in relation to the taxcontribution amounts paid or payable between the parent entity and the other members of the tax-consolidated group inaccordance with the arrangement.

(j) Cash and cash equivalentsCash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that arereadily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have amaturity of three months or less at the date of acquisition. Bank overdrafts are shown within borrowings in currentliabilities in the statement of financial position.



27


(k) Financial assetsInvestments are initially measured at fair value net of transactions costs. Subsequent to initial recognition, investments insubsidiaries are measured at cost.

Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profitand loss’, ‘held-to-maturity’ investments, ‘available-for-sale’ financial assets, and ‘loans and receivables’. Theclassification depends on the nature and purpose of the financial assets and is determined at the time of initialrecognition.

Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under acontract whose terms require delivery of the investment within the timeframe established by the market concerned, andare initially measured at fair value, net of transaction costs except for those financial assets classified as at fair valuethrough profit or loss which are initially measured at fair value.

Effective interest methodThe effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interestincome over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cashreceipts (including all fees on points paid or received that form an integral part of the effective interest rate, transactioncosts and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorterperiod.

Income is recognised on an effective interest rate basis for debt instruments other than those financial assets ‘at fairvalue through profit or loss’.

Available-for-sale financial assetsCertain financial assets such as floating rate notes held by the Consolidated Entity are classified as being available-for-sale and are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in theinvestments revaluation reserve with the exception of impairment losses, interest calculated using the effective interestmethod and foreign exchange gains and losses on monetary assets which are recognised directly in profit or loss. Wherethe investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in theinvestments revaluation reserve is included in profit or loss for the period.

Dividends on available-for-sale equity instruments are recognised in profit and loss when the Consolidated Entity’s rightto receive the dividends is established.

The fair value of available-for-sale monetary assets denominated in a foreign currency is determined in that foreigncurrency and translated at the spot rate at reporting date. The change in fair value attributable to translation differencesthat result from a change in amortised cost of the asset is recognised in profit or loss, and other changes are recognisedin equity.

Loans and receivablesTrade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an activemarket are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using theeffective interest method less impairment. Interest income is recognised by applying the effective interest rate.

Impairment of financial assetsFinancial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the endof each reporting period. Financial assets are impaired where there is objective evidence that as a result of one or moreevents that occurred after the initial recognition of the financial asset the estimated future cash flows of the investmenthave been impacted.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carryingamount and the present value of estimated future cash flows, discounted at the original effective interest rate. Thecarrying amount of financial assets including uncollectible trade receivables is reduced by the impairment loss throughthe use of an allowance account. Subsequent recoveries of amounts previously written off are credited against theallowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment lossdecreases and the decrease can be related objectively to an event occurring after the impairment was recognised, thepreviously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of theinvestment at the date the impairment is reversed does not exceed what the amortised cost would have been had theimpairment not been recognised.

In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss isrecognised directly in equity.


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(l) Property, plant and equipmentEach class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation andimpairment losses. Cost includes expenditure that is directly attributable to the acquisition of the item.

The depreciable amount of all fixed assets is depreciated on a diminishing value basis so as to write off the net cost orother revalued amount of each asset over its expected life, or in the case of leasehold improvements the shorter leaseterm, to its estimated residual value. The estimated useful lives, residual values and depreciation methods are reviewedat the end of each annual reporting period.

The depreciation rate used for each class of depreciable asset is:

Office furniture and equipment 15%Computer equipment and software 40%Leasehold improvements 20%

(m) AmortisationThe useful lives of the intangible assets are reviewed on an annual basis and the useful life is altered if estimates havechanged significantly. Gains or losses on the disposal of intangible assets are determined as the difference between thenet disposal proceeds and the carrying amount of the asset, and are recognised in income statement as other operatingincome or other operating costs, respectively.

(n) Leased assetsLeases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewardsincidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases.

Consolidated Entity as lesseeOperating lease payments are recognised as an expense on a straight-line basis over the lease term, except whereanother systematic basis is more representative of the time pattern in which economic benefits from the leased asset areconsumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which theyare incurred.

Lease incentives received to enter into operating leases are recognised as a liability. The aggregate benefits ofincentives are recognised as a reduction of rental expense on a straight-line basis.

(o) Intangible assetsIntangible assets with finite lives are carried at cost less accumulated amortisation and accumulated impairment losses.Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life andamortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate beingaccounted for on a prospective basis. Intangible assets with indefinite useful lives are carried at cost less accumulatedimpairment losses and are tested for impairment annually.

GoodwillGoodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested forimpairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and iscarried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carryingamount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to thosecash-generating units or groups of cash-generating units that are expected to benefit from the business combination inwhich the goodwill arose, identified according to operating segments (note 15).

Internally generated intangible assets – research and development expenditureExpenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development (or from the development phase of an internal project) isrecognised if, and only if, all of the following have been demonstrated:

the technical feasibility of completing the intangible asset so that it will be available for use or sale; the intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; how the intangible asset will generate probable future economic benefits; the availability of adequate technical, financial and other resources to complete the development and to use

or sell the intangible asset; and the ability to measure reliably the expenditure attributable to the intangible asset during its development.



29


(o) Intangible assets (cont’d)

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from thedate when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangibleasset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulatedamortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

(p) Impairment of Tangible and Intangible Assets other than Goodwill

At the end of each reporting period, the Consolidated Entity reviews the carrying amounts of its tangible and intangibleassets to determine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss(if any). When it is not possible to estimate the recoverable amount of an individual asset, the Consolidated Entityestimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable andconsistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, orotherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistentallocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment atleast annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, theestimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current marketassessments of the time value of money and the risks specific to the asset for which the estimates of future cash flowshave not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, thecarrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss isrecognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case theimpairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increasedto the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carryingamount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset iscarried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(q) Employee benefitsShort-term employee benefit obligationsLiabilities for wages, salaries and annual leave due to be settled within 12 months of the reporting date are recognised inrespect of employee’s services up to the reporting date and measured at the amounts expected to be paid when theliabilities are settled. Liabilities for wages and salaries are included as part of other payables and liabilities for annualleave are included as part of the provision for employee benefits.

Other long-term employee benefit obligationsThe liabilities for long service leave are recognised in the provision for employee benefits and measured as the presentvalue of expected future payments to be made in respect of services provided by employees up to the reporting dateusing the projected unit credit method. Consideration is given to expected future wage and salary levels, experience ofemployee departures and periods of service. Expected future payments are discounted using market yields at thereporting date on national government bonds terms to maturity and currency that match, as closely as possible, theestimated future cash outflows.

Regardless of when settlement is expected to occur, liability for long service leave is presented as a current liability inthe balance sheet if the Consolidated Entity does not have an unconditional right to defer settlement for a least 12months after the end of the reporting period.

(r) Contributed equityOrdinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options or costs associated with share buy-back areshown in equity as a deduction, net of tax, from the proceeds.

If the entity reacquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are deductedfrom equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and theconsideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly inequity.


30


(r) Contributed equity (cont’d)

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding anycosts of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstandingduring the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into accountthe after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and theweighted average number of shares assumed to have been issued for no consideration in relation to dilutive potentialordinary shares.

(s) PayablesTrade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged to makefuture payments resulting from the purchase of goods and services. These are usually settled within 30 days.

(t) ProvisionsProvisions are recognised when the Consolidated Entity has a present obligation (legal or constructive) as a result of apast event, it is probable that the Consolidated Entity will be required to settle the obligation, and a reliable estimate canbe made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligationat reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision ismeasured using the cash flows estimated to settle the present obligation, its carrying amount is the present value ofthose cash flows.

Onerous contractsPresent obligations arising under onerous contracts are recognised and measured as a provision. An onerous contract isconsidered to exist where the Consolidated Entity has a contract under which the unavoidable costs of meeting theobligations under the contract exceed the economic benefits expected to be received under it.

RestructuringA restructuring provision is recognised when the Consolidated Entity has developed a detailed formal plan for therestructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting toimplement the plan or announcing its main features to those affected by it. The measurement of a restructuring provisionincludes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarilyentailed by the restructuring and not associated with the ongoing activities of the entity.

(u) Financial instruments issued by the companyDebt and equity instruments are classified as either liabilities or as equity in accordance with the substance of thecontractual arrangement.

Transaction costs arising on the issue of equity instruments are recognised directly in equity as reductions in theproceeds of the equity instruments to which the costs relate. Transaction costs are the costs incurred directly inconnection with the issue of those equity instruments and which would not have otherwise been incurred had thoseinstruments not been issued.

Interest and dividends are classified as expenses or as distributions of profit consistent with the balance sheetclassification of the related debt or equity instruments.

Other financial liabilitiesOther financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interestexpense recognised on an effective yield basis.



31

4. Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial report required the making of estimations and assumptions that affect the recognised amountsof assets, liabilities, revenues and expenses. The estimates and associated assumptions are based on historical experienceand various other factors that are believed to be reasonable under the circumstances, the results of which form the basis ofmaking judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actualresults may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revisionand future periods if the revision affects both current and future periods.

The estimates and judgements that have a significant risk of causing an adjustment to the carrying value of assets and liabilitieswith the next financial year are discussed below.

(i) Key Estimates - ImpairmentThe Consolidated Entity assesses whether intangible assets (refer to note 15) with indefinite useful lives are impaired at leastannually. These calculations involve an estimation of the recoverable amount of the cash generating unit to which the intangibleassets with indefinite useful lives are allocated.

(ii) Useful Life of Technology Intangible Assets (including capitalised development)As described at 3(o) above, the Consolidated Entity reviews the estimated useful lives of its intangible assets at the end of eachreporting period. The directors have determined that the useful life of the Core Booking Systems is 15 years and between 5 and10 years for Ancilliary Systems, there is no change in this assessment from the prior year.

5. Segment information

(a) Description of segments

Management has determined the operating segments and the segment information disclosed based on reports reviewed by theManaging Director that are used to make strategic decisions.

The segments previously reported reflect a group structure that is no longer relevant to the decision making process of theManaging Director following the various corporate activities conducted throughout the financial year as described in theDirectors’ Report. The previously reported geographic based segments are no longer relevant or appropriate due to theinterdependence between the Consolidated Entity’s activities and their usage of assets and subsequent generation of revenues.The Managing Director considers that all members of the group provide the same service, being Travel Bookings. However dueto developments in the Consolidated Entity’s operations there are now two distinct classes of customer; consumers andbusiness. The reportable segments of the Consolidated Entity are now considered to be – Business to Consumer Travel (B2CTravel) and Business to Business Travel (B2B Travel).

(b) Segment information provided to the Managing Director

The segment information provided to the Managing Director for the year ended 30 June 2014 and 30 June 2013 is as follows:

2014 2013B2C Travel

$’000B2B Travel

$’000Total$’000

B2C Travel$’000

B2B Travel$’000

Total$’000

Revenues from external customers 91,545 3,643 95,188 72,540 324 72,864Interest Revenue 787 - 787 1,292 - 1,292Depreciation and amortisation (2,606) (195) (2,801) (1,982) (18) (2,000)Losses of associates (48) - (48) (58) - (58)

Profit/(loss) before tax 21,492 (413) 21,079 13,612 (2,169) 11,443

Income tax expense (1,952) - (1,952) (4,959) - (4,959)Profit/(loss) after tax 19,540 (413) 19,127 8,653 (2,169) 6,484

Segment assets 116,164 13,054 129,218 131,875 5,581 137,456

Segment liabilities 44,297 15,637 59,934 68,963 7,750 76,713

Acquisitions of non-current assets1 5,089 662 5,751 32,417 326 32,7431 Non-current assets excluding financial assets and deferred tax assets.


32

5. Segment information (cont’d)(a) Description of segments (cont’d)

There are no sales between segments. The revenue from external customers reported to the Managing Director is measured ina manner that is consistent with that in the consolidated income statement.

The amounts provided to the Managing Director with respect to total assets and total liabilities are measured in a manner that isconsistent with that of the consolidated balance sheet.

(b) Other segment information

Webjet Limited is domiciled in Australia. For the purposes of this disclosure, revenue is determined by location of the customerand assets are allocated based on the legal entity ownership of the asset. The amount of revenue and non-current assets inAustralia is as follows:

Revenue Non-Current Assets1

2014$‘000

2013$‘000

2014$’000

2013$’000

Australia 69,248 66,933 40,602 39,630All other countries 25,940 5,931 5,449 4,154

95,188 72,864 46,051 43,7841 Non-current assets excluding financial assets and deferred tax assets.

6. RevenueAn analysis of the Consolidated Entity’s revenue for the year is as follows:


2013$’000

Revenue from travel bookings 95,188 72,864

7. Investment incomeConsolidated

2014$’000

2013$’000

Interest income:Bank deposits 787 1,292

Dividend from equity investments 100 35887 1,327

The following is an analysis of investment income earned on financial assets bycategory of asset. Consolidated

2014$’000

2013$’000

Available-for-sale financial assets 100 35Loans and receivables (including cash and bank balances) 787 1,292

887 1,327



33

8. Other gains and lossesConsolidated

2014$’000

2013$’000

Net foreign exchange gains/(losses) - 208Gain on part sale of subsidiary 1,400 -Other income 2,056 1,700

3,456 1,908

No other gains or losses have been recognised in respect of loans and receivables or held-to-maturity investments, other thandisclosed in notes 10 and 11 and impairment losses recognised/reversed in respect of trade receivables.

9. Income taxes

(a) Income tax expenseConsolidated

2014$’000

2013$’000

Current tax 2,759 5,362Deferred tax (439) (703)Adjustments for current tax of prior periods (368) 300Total income tax expense recognised in the current year 1,952 4,959

(b) Reconciliation of income tax expense to prima facie tax payableConsolidated

2014$’000

2013$’000

Profit before income tax 21,079 11,443

Income tax expense calculated at 30% (2012: 30%) 6,323 3,433

Effect of overseas associates expenses not deductible - 17Effect of overseas subsidiaries expenses not deductible (22) 742Effect of previously unrecognized overseas tax losses not recognized as deferredtax assets (1,505) -Effect of income/expenses that are not assessable/deductible in determiningtaxable profit (474) 430Effect of utilised franking credits 13 5Effect of R&D tax incentives - (361)Effect of deferred tax expense relating to the origination and reversal of temporarydifferences (121) -

Utilisation of tax losses (1,029) -Differences for current tax of prior periods (368) 300Difference in overseas tax rates (865) 393

1,952 4,959

The tax rate used for the 2014 and 2013 reconciliations above is the corporate tax rate of 30% payable by Australian corporateentities on taxable profits under Australian tax law.

Current tax assets and liabilitiesConsolidated

2014$’000

2013$’000

Current tax assetsIncome tax refundable 1,881 -

Current tax liabilitiesIncome tax payable 1,544 1,904


34

9. Income taxes (cont’d)

Deferred tax balancesDeferred tax assets/(liabilities) arise from the following:

2014

Consolidated

Opening balanceUnder/overprovision

Recognised inprofit or loss

Recognised incomprehensive

incomeRecognised

directly in equity Closing balance$’000 $’000 $’000 $’000 $’000 $’000

Deferred tax liabilityInterest receivable (49) - 6 - - (43)Other assets (6) - 4 - - (2)Unrealised foreign exchangegain/losses (206) 147 - - (59)Property, plant & equipment - - (170) - - (170)Intangibles (2,972) - 276 - - (2,696)

(3,233) - 263 - - (2,970)

Deferred tax assetFinancial liabilities - - 125 - - 125Deferred revenue - - 488 - - 488Allowance for doubtful debts 41 - (41) - - -Sundry expense accruals 919 - (849) - - 70Provisions 920 - (338) - - 582Expenses deductible over 5 years 310 - (86) - - 224Intangibles & PPE 68 10 78Capital allowance 1,955 - (162) - - 1,793

4,213 - (853) - - 3,360

Unused tax losses and credits 411 - 1,029 - - 1,4404,624 - 176 - - 4,800

2013

Consolidated

Opening balanceUnder/overprovision

Recognised inprofit or loss

Recognised incomprehensive

incomeRecognised

directly in equity Closing balance$’000 $’000 $’000 $’000 $’000 $’000

Deferred tax liabilityInterest receivable (28) - (21) - - (49)Other assets (16) - 10 - - (6)Unrealised foreign exchangegain/losses - - (206) - - (206)Intangibles (2,531) - (441) - - (2,972)

(2,575) - (658) - - (3,233)

Deferred tax assetFinancial assets 26 - (26) - - -Associates 17 - (17) - - -Allowance for doubtful debts 25 - 16 - - 41Sundry expense accruals 267 - 652 - - 919Provisions 175 - 745 - - 920Expenses deductible over 5 years 50 - (83) - 343 310Intangibles - - 68 - - 68Capital allowance 2,042 - (87) - 1,955

2,602 - 1,268 - 343 4,213

Unused tax losses and credits 435 (117) 93 - - 4113,037 (117) 1,361 - 343 4,624



35

9. Income taxes (cont’d)

Tax consolidationRelevance of tax consolidation to the Consolidated EntityThe company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 1 July2007 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group is WebjetLimited. The members of the tax-consolidated group are identified in note 27. Tax expense/income, deferred tax liabilities anddeferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in theseparate financial statements of the members of the tax-consolidated group using the ‘separate taxpayer within group’ approachby reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under taxconsolidation. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax creditsof the members of the tax-consolidated group are recognised by the company (as head entity in the tax-consolidated group).

Nature of tax funding arrangements and tax sharing agreementsEntities within the tax-consolidated group have entered into a tax funding arrangement and a tax-sharing agreement with thehead entity. Under the terms of the tax funding arrangement, Webjet Ltd and each of the entities in the tax-consolidated grouphas agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset ofthe entity.

The tax sharing agreement entered into between members of the tax-consolidated group provides for the determination of theallocation of income tax liabilities between the entities should the head entity default on its tax payment obligations or if an entityshould leave the tax-consolidated group. The effect of the tax sharing agreement is that each member’s liability for tax payableby the tax-consolidated group is limited to the amount payable to the head entity under the tax funding arrangement.

10. Profit for the year

Profit before income tax includes the following specific expenses:


2013$’000

Depreciation and amortisation expenseDepreciation of property, plant and equipment 870 681Amortisation of intangible assets 1,931 1,319

2,801 2,000

Research and development costs expensed as incurred 1,767 1,868

Employee benefits expenseDefined contribution superannuation expense 1,313 949Other employee benefits 19,803 15,982

21,116 16,931

Restructuring costs - 3,935

Operating lease expense 1,347 886

Net foreign exchange (gains)/losses 645 -


36

11. Trade and other receivablesConsolidated

2014$’000

2013$’000

Trade receivables 20,274 17,006Allowance for doubtful debts - (144)

Other 34 16420,308 17,026

The average credit period for trade receivables is 30 to 90 days. An amount only becomes due on completion of the contractperiod which may be up to 12 months. Management is prudent in its provisions against these receivables but do not believeany balances are impaired in the current reporting period. Trade receivables are non-interest bearing.

Trade receivables that are neither past due nor impaired relate to long standing business partners with good track record.

Age of trade receivables that are past due but not impaired:-Consolidated

2014$’000

2013$’000

Up to 3 months - 1,9443 – 6 months - 184Total - 2,128

Movement in the allowance for doubtful debts:Consolidated

2014$’000

2013$’000

Balance at the beginning of the year 144 80Impairment losses recognised on receivables acquired in business combination - 144Impairment losses reversed (144) (80)

Balance at the end of the year - 144

12. Other financial assetsConsolidated

2014$’000

2013$’000

Available-for-sale investments carried at fair value:

Non-currentShares in unlisted companies (i) 255 200

(i) The Consolidated Entity holds 20% of the ordinary share capital of Taguchi Marketing Pty Ltd, a company involved in emailmarketing and distribution activities. The directors of the Consolidated Entity do not consider that the Consolidated Entity isable to exert significant influence over Taguchi Marketing Pty Ltd as the day-to-day running of the business is not under theinfluence of the Consolidated Entity.

13. Other assetsConsolidated

2014$’000

2013$’000

CurrentPrepayments 1,432 1,326Other 2,699 3,684

4,131 5,010



37

14. Property, plant and equipment

Consolidated

Softwareat cost

ComputerEquipment

at cost

Furniture& Fittings

at cost

OfficeEquipment

at cost

LeaseholdImprovem

-ents atcost

WorkIn

Progress Total$’000 $’000 $’000 $’000 $’000 $’000 $’000

Gross carrying amountBalance at 30 June 2012 733 1,180 125 144 382 - 2,564Additions 454 287 148 63 227 197 1,376Acquisition through businesscombination 18 3 - - 4 - 25Transfer to intangibles (122) - - - - - (122)Net foreign currency exchangedifferences - 3 1 - - - 4Balance at 30 June 2013 1,083 1,473 274 207 613 197 3,847Additions 1,114 333 1 495 475 - 2,418Transfers - - - - 197 (197) -Disposals - (63) (1) - (4) - (68)Derecognition of subsidiary - (36) (3) (3) - - (42)Net foreign currency exchangedifferences - (10) (5) (2) (9) - (26)Balance at 30 June 2014 2,197 1,697 266 697 1,272 - 6,129

Accumulated depreciation/amortisation and impairmentBalance at 30 June 2012 (363) (947) (67) (57) (161) - (1,595)Depreciation expense (209) (198) (21) (20) (233) - (681)Net foreign currency exchangedifferences - (1) - - - - (1)Balance at 30 June 2013 (572) (1,146) (88) (77) (394) - (2,277)Depreciation expense (363) (269) (29) (75) (134) - (870)Disposals - 63 - - 4 - 67Derecognition of subsidiary - 20 - - - - 20Net foreign currency exchangedifferences (18) (14) 6 2 2

-(22)

Balance at 30 June 2014 (953) (1,346) (111) (150) (522) - (3,082)Carrying amountsAs at 30 June 2013 511 327 186 130 219 197 1,570As at 30 June 2014 1,244 351 155 547 749 - 3,047


38

15. Intangible assetsConsolidated

Capitaliseddevelopment Trademarks

Otheridentifiableintangibles Goodwill Total

$’000 $’000 $’000 $’000 $’000

Balance at 30 June 2012 10,509 - 719 - 11,228Additions 2,666 107 1,412 - 4,185Acquisition through business combination - 6,107 - 21,050 27,157Transfer from property, plant and equipment 122 - - - 122Effect of foreign currency exchange differences - 868 68 798 1,734Balance at 30 June 2013 13,297 7,082 2,199 21,848 44,426Additions 2,807 57 253 - 3,117Derecognition of a subsidiary - - (308) - (308)Effect of foreign currency exchange differences (26) (134) (10) (119) (290)Balance at 30 June 2014 16,078 7,005 2,133 21,729 46,945

Accumulated amortisation and impairmentBalance at 30 June 2012 (616) - (247) - (863)Amortisation expense (1,157) - (162) - (1,319)Effect of foreign currency exchange differences - - (30) - (30)Balance at 30 June 2013 (1,773) - (439) - (2,212)Amortisation expense (1,488) - (443) - (1,931)Derecognition of a subsidiary - - 195 - 195Impairment expense - - - (190) (190)Effect of foreign currency exchange differences 13 - 9 - 22Balance at 30 June 2014 (3,249) - (677) (190) (4,116)

Carrying amountAs at 30 June 2013 11,524 7,082 1,760 21,848 42,214As at 30 June 2014 12,829 7,005 1,456 21,539 42,829

i) Capitalised developmentThe capitalised development intangible assets represent the Consolidated Entity’s travel booking system and licences as wellas additional distribution systems that enable customers to access this booking platform.

Capitalised development has a finite life and is amortised on a straight-line basis. Capitalised development relating to CoreBooking Systems is amortised over 15 years, while capitalised development relating to Ancilliary Systems is amortised over aperiod of 5 to 10 years (refer to note 4 (ii) for further information).

ii) TrademarksTrademarks have been acquired through the acquisition of the Zuji group of entities and are carried at cost less accumulatedimpairment losses. These intangible assets have been determined to have indefinite useful lives as there is no expiry and noforeseeable limit on the period of time over which these assets are expected to contribute to the cashflows of the ConsolidatedEntity. For impairment purposes the trademarks are tested at an overall cash generating unit level.

iii) Other identifiable intangiblesThe other identifiable intangible assets intangible assets acquired through the acquisition of the Zuji group of entities, domainnames, other software licences and development and supplier agreements.

Other intangible assets all have a finite life and are assessed individually in determining useful life for amortisation. The usefullives of these assets range from 3 - 5 years.

iv) GoodwillGoodwill has been acquired as part of business combinations and after initial recognition is measured at cost less accumulatedimpairment losses. Goodwill is not amortised but is assessed for impairment on an annual basis, or more frequently if events orchanges in circumstances indicate that it might be impaired.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units that are expected to benefit from the business combination in which the goodwill arise, identified according tooperating segments (refer to note 5).



39

15. Intangible assets (cont’d)

(a) Impairment tests for goodwill

Goodwill is monitored by management at the operating segment level. Management has identified the reportable segments tobe Business to Consumer Travel (B2C Travel) and Business to Business Travel (B2B Travel).

The segment-level summary of the carrying amount of goodwill and trademarks acquired from business combinations is shownbelow:

Consolidated2014

B2C Travel$’000

2014B2B Travel

$’000

2013B2C Travel

$’000

2013B2B Travel

$’000Carrying amount of goodwill 21,539 - 21,848 -Carrying amount of trademarks 7,005 - 7,082 -

28,544 - 28,930 -

(b) Key assumptions for value-in-use calculations

The recoverable amount of the cash-generating unit is determined based on value-in-use calculations. These calculations usecash flow projections based on financial budgets approved by management covering a five-year period. The ConsolidatedEntity has prepared a detailed projection for the financial year ended 30 June 2015 based on historical and current financialperformance, after including the expected change in revenues and margins resulting from the business combinations and newbusiness initiatives. The four following years have been calculated using a projection of the growth in overall total transactionvolume.

Management’s key assumptions used in the value-in-use calculation are a gross margin of 20%, a growth rate beyond budgetperiod of 3% and a discount rate of 13.7%. Management determined the budgeted gross margin based on past performanceand expectations for the future. The growth rate used does not exceed long-term average growth rates for the B2C Travelindustry. The discount rate used reflects externally sourced inputs and specific risks relating to the B2C Travel segment and thecountries in which it operates. Reasonably possible changes to these assumptions would not have an impact on therecoverable amount.

16. Trade and other payablesConsolidated

2014$’000

2013$’000

Trade payables 33,925 37,527Other 9,341 28,748

43,266 66,275

The credit period on trade payables ranges from 7 to 60 days. No interest is payable on trade payables.

17. Other financial liabilitiesConsolidated

2014$’000

2013$’000

Lease incentive liability 416 20416 20


40

18. ProvisionsConsolidated

2014$’000

2013$’000

CurrentEmployee benefits (i) 1,180 769Restructuring costs (ii) - 2,037Onerous contract (iii) - 762Gift vouchers (iv) 774 -Make-good provision (v) 76 467Other 145 35

2,175 4,070

Non-currentEmployee benefits 41 57Make-good provision (iv) 247 200

288 2572,463 4,327

(i) The current provision for employee benefits for the Consolidated Entity includes $240,501 of vested long service leaveentitlements accrued but not expected to be taken within 12 months.

(ii) The consolidated entity will incur no further costs to complete the restructure of the operations of Zuji. The prior yearbalance comprises expenditure on migrating the Zuji customer websites onto the Webjet booking system, and costsincurred in restructuring back office support processes and systems onto a common Webjet system.

(iii) The consolidated entity acquired a partly onerous contract as part of the Zuji Group acquisition.(iv) The consolidated entity provides for the value of gift vouchers sold or issued to customers but not yet redeemed or

expired.(v) The consolidated entity is required to restore the leased office premises to their original condition at the end of the

respective lease terms. A provision has been recognised for the present value of the estimated expenditure required toremove any leasehold improvements. These costs have been capitalised as part of the cost of leasehold improvementsand are amortised over the shorter of the term of the lease or the useful life of the assets.

Employeebenefits

Restructuringcosts

Onerouscontract

Make-goodprovision

Gift vouchersprovision

Other

$’000 $’000 $’000 $’000 $’000 $’000

Carrying amount at start of year 826 2,037 762 667 - 35Additional provision charged toprofit or loss

1,145 - - 48 774 145

Unused amounts reversed - - - - - -Amounts used during the year (750) (2,037) (762) (391) - (35)Carrying amount at end of year 1,221 - - 323 774 145

19. Other liabilitiesConsolidated

2014$’000

2013$’000

CurrentDeferred revenue (i) 1,712 954

Non-currentDeferred revenue (i) 7,563 -

9,275 954

(i) Deferred revenue relates to amounts received but not yet deemed to be earned, this includes amounts received forpromotional activities that have not yet taken place and other long term supplier agreements.



41

20. Issued capitalConsolidated

2014$’000

2013$’000

79,397,959 fully paid ordinary shares(2013: 79,397,959) 40,179 40,179

40,179 40,179

2014 2013No.’000 $’000

No.’000 $’000

Fully paid ordinary sharesBalance at beginning of financial year 79,398 40,179 71,066 11,042Issue of shares under placement (i) - - 6,944 25,000

Issue of shares under share purchase plan (ii) - - 1,388 4,995

Transaction costs arising on share issues - - - (1,201)

Deferred tax credit recognised directly in equity - - - 343

Balance at end of financial year 79,398 40,179 79,398 40,179

(i) On 20 December 2012, Webjet Ltd completed an issue of 6,944,445 shares to various sophisticated, professional andinstitutional investors at a price of $3.60 to fund its acquisition of the Zuji Group as announced on 12 December 2012.(ii) On 25 January 2013, Webjet Ltd completed an issue of 1,387,585 shares to existing shareholders at a price of $3.60 to fundits acquisition of the Zuji Group as announced on 12 December 2012.

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Share options granted under the employee share option plan carry no rights to dividends and no voting rights. The sharesbought back in the prior year were cancelled. Further details of the employee share option plan are contained in note 33 to thefinancial statements.

21. ReservesConsolidated

2014$’000

2013$’000

Available-for-sale revaluation reserve 55 -Equity-settled employee benefits 748 465Foreign currency translation 1,015 1,522

1,818 1,987

Equity-settled employee benefits reserveBalance at beginning of financial year 465 250Options expensed 283 215Balance at end of financial year 748 465

The equity-settled employee benefits reserve arises on the grant of share options to directors and executives under variousshare option scheme. Amounts are transferred out of the reserve and into issued capital when the options are exercised.


2013$’000

Foreign currency translation reserveBalance at beginning of financial year 1,522 (189)Exchange differences arising on translating the net assets of foreign operations (507) 1,711Balance at end of financial year 1,015 1,522

Exchange differences relating to the translation of the net assets of the Consolidated Entity’s foreign operations from theirfunctional currencies to the Consolidated Entity’s presentation currency (i.e. Australian dollars) are recognised directly in othercomprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previouslyaccumulated in the foreign currency translation reserve (in respect of translating the net assets of foreign operations) arereclassified to profit or loss on the disposal or partial disposal of the foreign operation.


42

22. Retained earningsConsolidated

2014$’000

2013$’000

Balance at beginning of financial year 18,645 21,796Profit attributable to owner of the Company 19,248 6,587Difference arising on disposal of interest in a subsidiary (86) -Payment of dividends (10,520) (9,738)Balance at end of financial year 27,287 18,645

23. Earnings per shareConsolidated

2014Cents

per share

2013Cents

per shareBasic earnings per shareFrom continuing operations 24.24 8.74Total basic earnings per share 24.24 8.74

Diluted earnings per shareFrom continuing operations 24.18 8.66Total diluted earnings per share 24.18 8.66

Basic earnings per shareThe earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are asfollows:

2014$’000

2013$’000

Profit for the year attributable to owners of the Company 19,248 6,587Earnings used in the calculation of basic EPS 19,248 6,587

2014No.’000

2013No.’000

Weighted average number of ordinary shares for the purposes ofbasic earnings per share 79,398 75,335

Diluted earnings per shareThe earnings used in the calculation of diluted earnings per share is as follows:

2014$’000

2013$’000

Profit for the year attributable to owners of the Company 19,248 6,587Earnings used in the calculation of diluted EPS 19,248 6,587

2014No.’000

2013No.’000

Weighted average number of ordinary shares used in the calculation of basic EPS 79,398 75,335Shares deemed to be issued for no consideration in respect of:

Employee options 208 759Weighted average number of ordinary shares used in the calculation of diluted EPS 79,606 76,094



43

24. Dividends on equity instruments2014 2013

Cents pershare

Total$’000

Cents pershare

Total$’000

Recognised amountsFully paid ordinary sharesInterim dividend for current year: 6.25 4,962 6.0 4,764Final dividend for prior year: 7.0 5,558 7.0 4,975

13.25 10,520 13.0 9,739Unrecognised amountsFully paid ordinary sharesFinal dividend for current year: 7.25 5,756 7.0 5,558

The directors have declared a fully franked final dividend of 7.25 cents per share to the holders of fully paid ordinary shares inrespect of the financial year ended 30 June 2014, to be paid to shareholders on 17 October 2014. This dividend has not beenincluded as a liability in these financial statements. The total estimated dividend to be paid is $5.76m.


2013$’000

Adjusted franking account balance 7,281 5,640Impact on franking account balance of dividends not recognised (2,467) (2,382)

4,814 3,258

The balance of the adjusted franking account includes:(a) franking credits that will arise from the payment of the amount of the provision of income tax(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.

25. Contingent liabilities and contingent assets

At reporting date, the Consolidated Entity had a bank guarantee facility of $14.0m (2013: $14.0m).

There are no other contingent liabilities or contingent assets requiring disclosure as at the date of this report.

26. Operating lease arrangements

(a) Leasing commitmentsThe Consolidated Entity leases various offices under non-cancellable operating leases expiring within 5 years. The leases havevarying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

Commitments for minimum leases payments in relation to non-cancellable operating leases are as follows:Consolidated

2014$’000

2013$’000

Not longer than 1 year 1,048 807Longer than 1 year and not longer than 5 years 2,349 2,429Longer than 5 years - -

3,397 3,236

(b) Capital commitmentsIt has been determined that the group has no capital commitments at the end of the financial year.


44

27. Subsidiaries

Name of subsidiary Country of incorporation

Proportion of owners interest andvoting power held by the

Consolidated Entity2014

%2013

%Webjet Marketing Pty Ltd Australia 100 100Webjet Operations (Australia) Pty Ltd Australia 100 100PlanitonEarth Pty Ltd Australia 100 100Zuji Pty Ltd Australia 100 100Webjet USA Holdings Inc United States of America 100 100Webjet Marketing North America LLC (i) United States of America 15 50Webjet Marketing NZ Pty Limited New Zealand 100 100Webjet Hotels NZ Pty Ltd New Zealand 100 100Lots of Hotels Limited (Previously Webjet UK Limited) United Kingdom 100 100Webjet International Ltd (Previously Webjet Hotels Limited) Hong Kong 100 100Lots of Hotels LLC Dubai 100 100Zuji Pte Ltd Singapore 100 100Zuji Ltd Hong Kong 100 100Zuji Travel Pte Ltd Singapore 100 100Zuji Properties A.V.V. Aruba 100 100Westweb Holdings Limited British Virgin Islands 100 100Webjet Singapore Limited Singapore 100 100Webjet Hong Kong Limited Hong Kong 100 100

Webjet Limited is the head entity within the tax-consolidated group. The fully-owned Australian subsidiaries above are all part ofthe tax-consolidated group.

(i) On 31 December 2013, Webjet USA Holdings LLC (a subsidiary of Webjet Limited) sold a 35% shareholdingin Webjet Marketing North America LLC. The sale reduced the shareholding in Webjet Marketing North America LLCfrom 50% to 15% resulting in a loss of control. Therefore from 31 December 2013 it is no longer accounted for as asubsidiary, it is now accounted for as an associate.

The gain recorded in relation to this sale in the year ended 30 June 2014 was $1,400k, the portion of this gain that wasattributable to measuring the retained investment in the former subsidiary at its fair value at the date of sale was $216k.The gain on sale is recorded in other revenue.

28. Deed of guarantee

The following companies are party to a deed of cross guarantee under which each entity guarantees the debt of the others:

Webjet LtdWebjet Marketing Pty LtdWebjet Operations (Australia) Pty LtdPlanitonEarth Pty LtdZuji Pty Ltd

By entering into the deed, each wholly owned entity is exempt from the requirement to prepare a financial report and directors’report under Class Order 98/1418 issued by the Australian Securities and Investments Commission. For the purposes of theClass Order, the above listed companies represent a ‘closed group’ and, by the absence of any other party to the deed that iscontrolled by Webjet Ltd, also an ‘extended closed group’.

Set out below is a consolidated income statement, consolidated statement of comprehensive income, a consolidated balancesheet and a summary of movements in consolidated retained earnings for the closed group.



45

28. Deed of guarantee (cont’d)

Consolidated income statement2014$’000

2013$’000

Revenue 64,553 62,899Investment income 906 1,364Other gains and losses 1,587 2,317

Share of losses of associates - (58)Employee benefits expenses (13,156) (12,377)Depreciation and amortisation expenses (1,906) (1,443)Marketing expenses (16,952) (15,460)Operating costs (14,063) (13,336)Option expenses (283) (215)Technology expenses (3,861) (4,892)Administrative expenses (1,105) (167)Directors’ fees (473) (533)Finance costs (333) (79)Other expenses (2,261) (3,130)Profit before tax 12,653 14,890Income tax expense (3,153) (4,897)Profit for the year 9,500 9,993

Consolidated statement of comprehensive income2014$’000

2013$’000


Other comprehensive income, net of income tax

Items that may be reclassified subsequently to profit or lossExchange differences on translating foreign operations - (18)Other comprehensive income for the year, net of tax - (18)Total comprehensive income for the year 9,500 9,975


46

28. Deed of guarantee (cont’d)

Consolidated balance sheet2014$’000

2013$’000

Current assetsCash and bank balances 30,817 53,019Trade and other receivables 5,585 10,201Other financial assets - 17Current tax asset 1,881 -Other assets 2,678 1,957Total current assets 40,961 65,194Non-current assetsInvestments in associates 16,870 16,870Other financial assets 255 200Property, plant and equipment 2,624 1,387Deferred tax assets 3,346 4,137Intangible assets 25,984 21,992Total non-current assets 49,079 44,586

Total assets 90,040 109,780

Current liabilitiesTrade and other payables 21,216 39,027Other financial liabilities 416 20Current tax liabilities - 667Provisions 1,613 2,933Other liabilities 382 831Total current liabilities 23,627 43,478Non-current liabilitiesDeferred tax liabilities 2,800 3,233Provisions 241 257Other liabilities 1,245 -Total non-current liabilities 4,286 3,490

Total liabilities 27,913 46,968

Net assets 62,127 62,812EquityIssued capital 40,179 40,179Reserves 782 447Retained earnings 21,166 22,186

Total equity 62,127 62,812

Summary of movements in consolidated retained earnings2014$’000

2013$’000

Balance at beginning of financial year 22,186 21,931Profit attributable to owner of the Company 9,500 9,993Payment of dividends (10,520) (9,738)Balance at end of financial year 21,166 22,186



47

29. Investments in Associates

Name of associate Country of incorporation

Proportion of owners interest and votingpower held by the Consolidated Entity

2014%

2013%

Webjet Europe Ltd (i) Malta 50 50Webjet Marketing North America LLC (ii) United States of America 15 50

(i) Webjet Operations (Australia) Pty Ltd, a wholly owned subsidiary of Webjet Ltd, holds a 50% interest in Webjet Europe Ltdwith World Aviation Services Limited holding the remaining 50% interest. Webjet Ltd and the directors of Webjet Ltd do nothave the ability to control the operations of Webjet Europe Ltd. The financial year end date of Webjet Europe Ltd is 30June. This was the reporting date established when that company was incorporated. For the purpose of applying theequity method of accounting, the financial statements of Webjet Europe Ltd for the year ended 30 June 2014 have beenused.

(ii) On 31 December 2013, Webjet USA Holdings LLC (a subsidiary of Webjet Limited) sold a 35% shareholding in WebjetMarketing North America LLC. The sale reduced the shareholding in Webjet Marketing North America LLC from 50% to15% resulting in a loss of control. Therefore from 31 December 2013 it is no longer accounted for as a subsidiary, it isnow accounted for as an associate.

As these investments are immaterial to the Consolidated Entity, financial information is displayed in aggregate below.

2014$’000

2013$’000

Aggregate carrying amount of individually immaterial associates 175 -Aggregate amount of the Consolidated Entity’s share of profits/(losses) of associates (48) (58)

30. Cash and cash equivalents

(a) Reconciliation of cash and cash equivalentsFor the purposes of the consolidated statement of cashflows, cash and cash equivalents includes cash on hand in banks, net ofoutstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the consolidatedstatement of cash flows can be reconciled to the related items in the consolidated balance sheet as follows:


2013$’000

Cash and bank balances 51,792 66,812Bank overdraft - -

51,792 66,812

(b) Reconciliation of profit for the period to net cash flows from operating activitiesConsolidated

2014$’000

2013$’000


Impairment of non-current assets 190 -Depreciation and amortisation 2,801 2,000Share of losses from associates 48 58Options expense 283 215Foreign exchange translation (1,115) 274

Changes in assets and liabilitiesDecrease/(increase) in trade, term and other receivables (3,263) (11,297)Decrease/(increase) in prepayments 879 1,257Decrease/(increase) in deferred tax (439) (929)Increase/(decrease) in trade payables and accruals (19,763) 21,845Increase/decrease) in provisions (1,864) 3,714Increase/(decrease) in tax liability (2,241) (17)Increase/(decrease) in other liabilities 8,717 933

Net cash generated from operating activities 3,360 24,537


48

31. Financial instruments

(a) Capital risk managementThe Consolidated Entity has a capital risk and investment policy to provide guidance for its capital requirements. The policy isreviewed annually to take into consideration the Consolidated Entity’s changing risk and short and long term funding needs. Atpresent the Consolidated Entity has no financial debt other than that disclosed in the statement of financial position representingliabilities incurred in the normal course of operations. The Consolidated Entity’s debt and capital includes ordinary share capital,and financial liabilities, supported by financial assets. The Consolidated Entity has significant cash reserves and the investmentpolicy ensures that the organisation maximises its return from funds invested whilst adopting a very conservative approach torisk and also ensuring sufficient working capital is maintained.

(b) Categories of financial instrumentsConsolidated

2014$’000

2013$’000

Financial assetsLoans and receivables 20,308 17,026Cash and cash equivalents 51,792 66,812Available-for-sale financial assets 255 200

Financial liabilitiesFair value through profit or loss (FVTPL):Amortised cost 43,266 66,275

(c) Financial risk management objectivesThe Consolidated Entity’s financial instruments consist of deposits with banks and trade receivables incurred in the normalcourse of operations.

The senior executives of the Consolidated Entity meet regularly to analyse foreign currency and interest rate exposure todetermine if the current treasury policy is appropriate in the current economic climate.

(d) Market riskThe Consolidated Entity’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates andinterest rates. The Consolidated Entity analyses its risk by completing sensitivity testing on its foreign currency and interest rateexposures and determining the potential impact on its effected expenses and revenue of movements in these rates. If thepotential variance is material then management may seek to minimise this exposure but it does not consider this to be the caseat this time.

(i) Foreign exchange

2014 USD SGD HKD AED EUR Other‘000 ‘000 ‘000 ‘000 ‘000 ‘000

Cash and cash equivalents 12,457 2,364 5,436 829 195 2,025Trade receivables 7,680 1,012 667 1,559 904 584Trade payables (4,244) (3,199) (4,411) (2,722) (4,025) (1,840)

15,893 177 1,692 (334) (2,926) 769

2013 USD SGD HKD AED EUR Other‘000 ‘000 ‘000 ‘000 ‘000 ‘000

Cash and cash equivalents 5,061 4,019 5,445 167 42 1,827Trade receivables 4,828 518 1,972 373 263 1,746Trade payables (3,923) (2,946) (11,025) (2,159) (1,680) (2,061)

5,966 1,591 (3,608) (1,619) (1,375) 1,512



49

31. Financial instruments (cont’d)

(d) Market risk (cont’d)

The following tables details the Consolidated Entity’s sensitivity to a 10% increase and decrease in the Australian dollar againstthe relevant currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key managementpersonnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. Thesensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at theperiod end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit and other equitywhere the Australian dollar strengthens 10% against the relevant currency. For a 10% weakening of the Australian dollaragainst the relevant currency, there would be a comparable impact on the profit and other equity, and the balances below wouldbe negative.

2014 USD($‘000)

SGD($’000)

HKD($‘000)

AED($‘000)

EUR($’000)

Other($’000)

Profit or loss 1,589 18 169 (33) (293) 77Other equity - - - - - -

2013 USD($‘000)

SGD($’000)

HKD($‘000)

AED($‘000)

EUR($’000)

Other($’000)

Profit or loss 597 159 (361) (162) (138) 151Other equity - - - - - -

(ii) Interest RatesThe Consolidated Entity does not hedge its exposure to interest rate movements and does not invest in fixed interest financialinstruments. At 30 June 2014 it had $51.8M (2013: $66.8M) in cash and deposits. The average interest rate on all deposits for2014 was 3.72% (2013: 4.04%).

Interest received for the Consolidated Entity for 2014 was $0.8M. A table showing the sensitivity of this number to interest ratemovements is detailed below.

Average Interest Rates

Income($000)

Variance toactual($’000)

4.72% (+1.0%) 999 2124.22% (+0.5%) 893 1063.72% Actual 787 -3.22% (-0.5%) 681 (106)2.72% (-1.0%) 575 (212)

Management has considered that both a positive and negative 1% variance is sufficient to illustrate the potential variations ininterest income.

(e) Credit risk managementCredit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to theConsolidated Entity. The Consolidated Entity has adopted a policy of only dealing with parties considered to be creditworthy.The Consolidated Entity does not require collateral in respect of financial assets. The Consolidated Entity exposure and thecredit ratings of its counterparties are continuously monitored. The Consolidated Entity measures credit risk on a fair valuebasis.

The majority of the trade receivables are with debtors that operate in the travel industry and there is not considered to be anymaterial concentration of credit risk within the Consolidated Entity.

The carrying amount of financial assets in the financial statements, net of any impairment and provision, represents theConsolidated Entity’s maximum exposure to credit risk.

(f) Liquidity risk management

The Consolidated Entity manages liquidity risk by maintaining adequate reserves and banking facilities by continuouslymonitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Consolidated Entity’s non-interest bearing liabilities as at 30 June 2014 of $43.0M (2013: $63.0M) are expected to besettled within up to 60 days following the reporting period.


50

32. Share-based payments

Fair value of share options granted in the year

There were 3,000,000 options issued during the year ending 30 June 2014. Options granted to John Guscic in the 2014financial year were independently valued by Leadenhall VRG Pty Ltd.

The weighted average fair value of the share options granted during the financial year was $0.17. Options were priced using theBlack-Scholes option pricing formula. Where relevant, the expected life used in the model has been adjusted based onmanagement’s best estimate for the effects of non-transferability, exercise restrictions (including the probability of meetingmarket conditions attached to the option), and behavioural considerations. Expected volatility is based on historical share pricevolatility over the past 5 years. To allow for the effects of early exercise, it was assumed the valuation uses an estimate of theexpected life of the option.

These option valuations used the following inputs:-

Inputs into the model Tranche 1 Tranche 2 Tranche 3Spot price of underlying share $2.71 $2.71 $2.71

Exercise price $5.00 $5.50 $6.00

Risk free rate 3.03% 3.25% 3.46%

Volatility 35.0% 35.0% 37.5%Dividend yield 4.8% 4.8% 4.8%

Vesting date 01/07/2015 01/07/2016 01/07/2017Vesting period 18 months 18 months 18 months

Grant date 13/11/2013 13/11/2013 13/11/2013

Expiry date 01/07/2018 01/07/2019 01/07/2020

Total life 56 months 68 months 80 months

Expected life 38 months 50 months 62 months

Employee share option planThe following executive share-based payment arrangements were in existence during the current and comparative reportingperiods:

Options series Number Grant date Expiry date

Exerciseprice

$

Fair value at grantdate

$John Guscic – Tranche 1(a) 500,000 19/10/2011 30/06/2015 $2.60 $0.22John Guscic – Tranche 1(b) 500,000 19/10/2011 30/06/2015 $2.60 $0.22John Guscic – Tranche 2(a) 500,000 19/10/2011 30/06/2016 $3.10 $0.20John Guscic – Tranche 2(b) 500,000 19/10/2011 30/06/2016 $3.10 $0.20John Guscic – Tranche 3(a) 500,000 19/10/2011 30/06/2017 $3.80 $0.22John Guscic – Tranche 3(b) 500,000 19/10/2011 30/06/2017 $3.80 $0.22John Guscic – Tranche 1(c) 1,000,000 13/11/2013 30/06/2018 $5.00 $0.14John Guscic – Tranche 2(c) 1,000,000 13/11/2013 30/06/2019 $5.50 $0.16John Guscic – Tranche 3(c) 1,000,000 13/11/2013 30/06/2020 $6.00 $0.21

(a) Tranche 1 – Vested on 1/09/2012 upon achievement of the board determined budget for 2012. Tranche 2 – Vested on 1/09/2013 as aresult of the Company achieving the board determined budget for 2013. Tranche 3 – Vests on 1/09/2014 if Company achieves boarddetermined budget for 2014.

(b) Tranche 1 – Vested on 1/09/2012 upon remaining in employment as at 30 June 2012. Tranche 2 – Vested on 1/09/2013 as a result ofremaining in employment at 30 June 2013. Tranche 3 – Vests on 1/09/2014 if remains in employment at 30 June 2014.

(c) Tranche 1 – Vests on 30/06/2015 if remains in employment at 30 June 2015. Tranche 2 – Vests on 30/06/2016 if remains inemployment at 30 June 2016. Tranche 3 – Vests on 30/06/2017 if remains in employment at 30 June 2017.



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32. Share-based payments (cont’d)

The following reconciles the outstanding share options granted under the employee share option plan at the beginning and endof the financial year:

2014 2013

Number ofoptions

Weightedaverage exercise

price

Number ofoptions

Weightedaverage exercise

price

Balance at beginning of the financial year 3,000,000 3.1667 3,000,000 3.1667Granted during the financial year 3,000,000 5.50 - -Forfeited during the financial year - - - -

Exercised during the financial year (i) - - - -Expired during the financial year - - - -Balance at end of the financial year (ii) 6,000,000 4.33 3,000,000 3.1667Exercisable at end of the financial year 2,000,000 2.85 1,000,000 2.6000

(i) Exercised during the financial yearNo share options granted under the employee share option plan were exercised during the financial year.

(ii) Balance at end of the financial yearThe share options outstanding at the end of the financial year had an weighted average exercise price of $4.33 (2013: $3.17),and a weighted average remaining contractual life of 3.5 years (2013: 3.0 years).

33. Related party transactions

(a) Key management personnel compensationThe aggregate compensation made to key management personnel of the company and the Consolidated Entity is set out below:

Consolidated2014

$2013

$Short-term employee benefits 1,745,956 2,397,182Post-employment benefits 142,052 144,013Share-based payment 283,127 214,639

2,171,135 2,755,834

Further details of the directors and senior executives compensation is contained within the remuneration report on page 6.

(b) Transactions with other related parties

Transactions between Webjet Ltd and its related partiesMinter Ellison Lawyers of which Don Clarke is a principal was paid a total $426,469 (2013: $1,374,058) during the year. Alltransactions were conducted on a commercial arm’s length basis and charged accordingly. An amount of $1,217 was owed asat 30 June 2014 (2013: $124,445) to Minter Ellison Lawyers.

PT. AbdiTeknologiInformasi (ATI) of which Brad Holman is a director was paid a total of $37,255 (2013: $8,116) during the year.All transactions were conducted on a commercial arm’s length basis and charged accordingly. No amount was outstanding asat 30 June 2014 (2013: nil) to PT. AbdiTeknologilnformasi.


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34. Business Combination(a) Zuji Group

(i) Summary of acquisition

On 22 March 2013 the Group acquired 100% of the issued share capital of the following entities comprising the Zuji Group:

Name of subsidiary Country of incorporationZuji Pty Ltd AustraliaZuji Pte Ltd SingaporeZuji Properties A.V.V. ArubaZuji Ltd Hong KongZuji Tavel Pte Ltd Singapore

(ii) Revenue and profit contribution

Between the acquisition date of 22 March 2013 to 30 June 2013, the Zuji Group contributed to the Consolidated Entity revenuesof $8.0m and a net loss of $1.5m.

It was determined to be impracticable to disclose the revenue and loss for the Zuji Group as if the acquisition had occurred at 1July 2012 due to the difference in financial years making the results indeterminable.

(iii) Measurement period adjustments

As at 30 June 2013 the initial accounting for this acquisition was incomplete due to the various matters not yet being finalisedand so provisional accounting was used. This has resulted in amounts being restated in the consolidated balance sheet for 30June 2013 as follows:

Additional consideration of USD $2.0m, translated to $2.2m, paid on 12 December 2013 as a result of a purchaseprice adjustment linked to target working capital levels following the completion accounts process for the Zuji Group.This was referred to in the orginial contract but not recognised in the provisional accounting because the amount wasunable to be reliably determined at the time of preparing the financial statements for the year ended 30 June 2013.

Additional $582k recognised for the fair value of trademarks that has resulted in goodwill decreasing by the sameamount.

Additional $1,038k of trade and other payables recognised that has resulted in goodwill increasing by the sameamount.

Goodwill recognised as a result of the acquisition has increased from $18.20m to $20.86m

iv) Purchase consideration – cash outflow2014$’000

2013$’000

Outflow of cash to acquire subsidiary, net of cash acquiredCash consideration 2,208 23,720Less: Balances acquiredCash - 18,834Outflow of cash – investing activities 2,208 4,886

(b) Westweb Group

(i) Summary of acquisition

On 30 June 2013 the Group acquired the remaining 50% of the issued share capital of Westweb Holdings Limited, resulting inthe Consolidated Entity gaining control over the Westweb Group:

Name of subsidiary Country of incorporationWestweb Holdings Ltd British Virgin IslandsWebjet Hong Kong Ltd Hong KongWebjet Singapore Ltd Singapore

(ii) Revenue and profit contribution

Between the acquisition date to 30 June 2013, the Westweb Group contributed to the Consolidated Entity revenues of $nil andnet profit of $nil.

Had the acquisition occurred on 1 July 2012, consolidated revenue and net loss for the Group for the year ended 30 June 2013would have been $185k and $428k respectively.



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35. Remuneration of auditorsConsolidated

2014$

2013$

Auditor of the parent entityAudit or review of the financial report 128,500 155,650

128,500 155,650Network firm of the parent entity auditorAudit or review of the financial report 97,300 70,500

97,300 70,500

The auditor of Webjet Limited is BDO Audit (SA) Pty Ltd.

36. Events after the reporting periodA final dividend of 7.25 cents per share, fully franked has been declared by the directors for payment 17 October 2014.

Webjet entered into a binding Heads of Agreement to acquire the SunHotels Group with effect from 1 July 2014. SunHotels,established in 2002, is a substantial online hotel provider with a turnover in excess of €90 million (approximately AUD $130m)and specialises in the provisioning of a wide range of hotels and transfers in European resort destinations selling into the majormarkets of Scandinavia and the UK. As such this acquisition will form an important cornerstone platform for the immediateextension of product sourcing and distribution opportunities underpinned by more than 6,000 directly contracted hotels in theexisting portfolio leveraged against a fully owned and scalable technology platform which has been operational for over fiveyears.

37. Parent entity informationThe accounting policies of the parent entity, which have been applied in determining the financial information shown below, arethe same as those applied in the consolidated financial statements. Refer to note 3 for a summary of the significant accountingpolicies relating to the Consolidated Entity.

30 June 2014$’000

30 June 2013$’000

Financial positionAssetsCurrent assets 3,515 8,477Non-current assets 48,769 45,591Total assets 52,284 54,068

LiabilitiesCurrent liabilities 8,324 7,912Non-current liabilities 2,721 3,018Total liabilities 11,045 10,930

EquityIssued capital 40,179 40,179Retained earnings 312 2,494Reserves - Equity settled employee benefits 748 465Total equity 41,239 43,138

30 June 2014$’000

30 June 2013$’000

Financial performanceProfit for the year 11,025 11,882Other comprehensive income - -Total comprehensive income 11,025 11,882

38. Approval of financial statementsThe financial statements were approved by the board of directors and authorised for issue on 19 August 2014.

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Tel: +61 8 7324 6000Fax: +61 8 7324 6111www.bdo.com.au

Level 7, BDO Centre420 King William StAdelaide SA 5000GPO Box 2018, Adelaide SA 5001AUSTRALIA

BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275,an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, andform part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than forthe acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF WEBJET LIMITED

REPORT ON THE FINANCIAL REPORT

We have audited the accompanying financial report of Webjet Limited, which comprises theconsolidated balance sheet as at 30 June 2014, the consolidated income statement, theconsolidated statement of comprehensive income, the consolidated statement of changes inequity and the consolidated statement of cash flows for the year then ended, notes comprising asummary of significant accounting policies and other explanatory information, and the directors’declaration of the consolidated entity comprising the company and the entities it controlled atthe year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report thatgives a true and fair view in accordance with Australian Accounting Standards and theCorporations Act 2001 and for such internal control as the directors determine is necessary toenable the preparation of the financial report that gives a true and fair view and is free frommaterial misstatement, whether due to fraud or error. In Note 1, the directors also state, inaccordance with Accounting Standard AASB 101 Presentation of Financial Statements, that thefinancial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. Weconducted our audit in accordance with Australian Auditing Standards. Those standards requirethat we comply with relevant ethical requirements relating to audit engagements and plan andperform the audit to obtain reasonable assurance about whether the financial report is free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial report. The procedures selected depend on the auditor’s judgement,including the assessment of the risks of material misstatement of the financial report, whetherdue to fraud or error. In making those risk assessments, the auditor considers internal controlrelevant to the company’s preparation of the financial report that gives a true and fair view inorder to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the company’s internal control. An auditalso includes evaluating the appropriateness of accounting policies used and the reasonablenessof accounting estimates made by the directors, as well as evaluating the overall presentation ofthe financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

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Independence

In conducting our audit, we have complied with the independence requirements of theCorporations Act 2001. We confirm that the independence declaration required by theCorporations Act 2001, which has been given to the directors of Webjet Limited, would be in thesame terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion:

(a) the financial report of Webjet Limited is in accordance with the Corporations Act 2001,including:

(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June2014 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations2001; and

(b) the financial report also complies with International Financial Reporting Standards asdisclosed in Note 1.

REPORT ON THE REMUNERATION REPORT

We have audited the Remuneration Report included in pages 6 to 10 of the directors’ report forthe year ended 30 June 2014. The directors of the company are responsible for the preparationand presentation of the Remuneration Report in accordance with section 300A of theCorporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Webjet Limited for the year ended 30 June 2014complies with section 300A of the Corporations Act 2001.

BDO Audit (SA) Pty Ltd

Michael HaydonDirector

Adelaide, 19 August 2014

Webjet LimitedAnd Controlled EntitiesAdditional stock exchange information

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Additional securities exchange information as at 30 June 2014Number of holders of equity securitiesOrdinary share capital79,397,959 fully paid ordinary shares are held by 5,066 individual shareholders. All issued ordinary shares carry one voteper share.Options6,000,000 options are held by an individual option holder. Options do not carry a right to vote.

Distribution of holders of equity securitiesFully paid ordinary

shares Options1 – 1,000 1,398 -1,001 – 5,000 2,357 -5,001 – 10,000 677 -10,001 – 100,000 593 -100,001 and over 41 1

5,066 1Holding less than amarketable parcel 207 -

Substantial shareholdersFully paid ordinary shares

Ordinary shareholders NumberThorney Investments 10,575,613Denver Investments 7,398,958Mr Steven Scheuer 4,476,254State of Georgia Division of Investment Services 3,931,600Highclere International Investors 3,676,830

30,059,255

Twenty largest holders of quoted equity securities

Ordinary shareholders

Fully paid ordinary shares Partly paid ordinaryshares

Number Percentage Number Percentage

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 18,313,403 23.08 - -

NATIONAL NOMINEES LIMITED 6,308,450 7.95 - -

J P MORGAN NOMINEES AUSTRALIA LIMITED 5,897,802 7.43 - -

MR STEVEN SCHEUER <NO 1 ACCOUNT> 3,064,745 3.86 - -

EQUITAS NOMINEES PTY LIMITED <2874398 A/C> 1,894,321 2.39 - -

UBS NOMINEES PTY LTD 1,834,605 2.31 - -

MS KING-ENG TAN 1,673,464 2.11 - -

CITICORP NOMINEES PTY LIMITED 1,609,912 2.03 - -

MR JOHN LEMISH 1,541,300 1.94 - -

MICROEQUITIES ASSET MANAGEMENT PTY LTD <NANOCAP NO 6 A/C> 1,477,226 1.86 - -

JAYELLE SUPER PTY LTD <JOHN LEMISH SUPER FUND A/C> 1,468,700 1.85 - -

MR STEVEN SCHEUER <NO 2 ACCOUNT> 1,135,717 1.43 - -

MR CHRIS CARR + MRS BETSY CARR 875,000 1.1 - -

MR IAN STANLEY BOOTES + MRS KYLIE BOOTES 748,750 0.94 - -

CRIMSON SKIES PTY LTD <CRIMSON SKIES S/F A/C> 580,637 0.73 - -

BNP PARIBAS NOMS PTY LTD <DRP> 457,275 0.58 - -

MR RICHARD ALLAN NOON 311,000 0.39 - -

YAZAD SUPER PTY LTD <YAZAD SUPER FUND A/C> 300,000 0.38 - -

NATIONAL NOMINEES LIMITED <DB A/C> 295,500 0.37 - -

CRIMSON SKIES PTY LTD <RICHARD NOON FAMILY A/C> 259,792 0.33 - -

50,047,599 63.06 - -


Additional securities exchange information

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Additional securities exchange information as at 30 June 2014 (cont’d)

Company secretaryMichael Sheehy

Registered office Principal administration officeLevel 2 Level 2509 St Kilda Road 509 St Kilda RoadMelbourne Vic 3004 Melbourne Vic 3004Phone: (03) 9820 9214 Phone: (03) 9820 9214

Share registryComputershare Investor Services Pty LtdLevel 5115 Grenfell StreetAdelaide SA 5000Tel: (08) 8236 2300

Webjet Limited

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